Polytechnic University of the Philippines

COLLEGE OF BUSINESS ADMINISTRATION

DEPARTMENT OF OFFICE ADMINISTRATION
Sta. Mesa, Manila

INSTRUCTIONAL MATERIALS
for

OALT 3023
LEGAL TERMINOLOGY

PREPARED By:

Raquel G. Javier, MAF, LPT

First Semester, SY 2021-22

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INTRODUCTION

Welcome to LEGAL TERMINOLOGY course. This Instructional Material (IM) has been designed
to help you gain knowledge on legal vocabularies and terminologies applied in the different judicial
system and in the Philippine law system – civil law, criminal law, business law, labor laws, and
the like. It begins with the roles and responsibilities of various professionals encountered in a
legal setting. Then it explores the workings of the court system, time and financial management,
organizational skills, communication skills, the production and processing of legal documents,
and legal terminology and citation. The content you study will help prepare you to enter the
workforce now and to face the changes you will encounter in the future.

Happy learning!

Course Requirement/s:

1. Students will complete the learning activities as assigned.

2. At the end of the semester, students will return the instructional materials
for grading purposes.

Course Grading System:

Class standing
Quizzes 70%
Learning Activity/Projects/Assignments

Midterm / Final Exam 30%

Midterm Grade (First Grading) + Final Term Grade (Second Grading) 100%
2 FINAL GRADE

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Week 1

ORIENTATION

Introduction of the course contents, VMGO of the University, course

overview, requirements and activities and expectations.

The PUP Philosophy

As a state university, the Polytechnic University of the Philippines

believes that:

• Education is an instrument for the development of the citizenry

and for the enhancement of nation building; and

• That meaningful growth and transmission of the country are best

achieved in an atmosphere of brotherhood, peace, freedom,
justice and nationalist-oriented education imbued with the spirit of
humanist internationalism.

Mission of the College

In order to realize its vision of quality education, research program and involvement in the socio-
economic activities of the country, the college with its available resources must consider initiating
the following:

• Refine knowledge on the developments affecting on business trends, issues and techniques
used in the dynamic global market through research and continuing education, and
Information and Communications Technology (ICT);

• Build a team of confident, creative students possessing a high degree of initiative, self-respect
and self-discipline;

• Develop communication protocol on standards as agreed upon, and imbue the same with
social consciousness and moral values;

• Promote the dignity of work and professional growth and then attract and retain the best in
global talent;

• Build a value proposition thru culture of excellence and innovations, enabled by best in market
talent and superior operating effectiveness and flexibility;

• Establish linkages and networking with industries, alumni, local an d foreign business
executives to hasten professional growth among its faculty, students and administrative
staff;

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• Provide equal opportunity to underprivileged but intellectually qualified students through
scholarship programs;

• Measure up to the standards of academic excellence in global market;

• Advance the growth of aspiring and socially responsible entrepreneurs; and

• Respond to the technical needs of a community by providing extension services.

Department of Office Administration

Primarily, the department desires to provide quality education in the field of office administration
with focus on medical, corporate and legal transcriptions. For this reason, the department offers
a four-year degree course leading to Bachelor of Science in Office Administration, and a non-
degree course also in this field; the Certificate in Office Administration and Associate in Office
Administration. All of these courses were considered in the light of high demand for
transcriptionists in the country.

Objectives

• Equip its graduates with knowledge, skills and competencies, values and attitudes that
prepare them for the demands of a constantly evolving global market in Office Administration.

• Provide the students with an environment conducive to critical thinking through research,
extension and production.

• Inculcate in the student’s consciousness a positive self-concept, values and attitudes that will
make them cope with the demands of work.

• Instil in the student the desire to excel and to lead in the community and in the field of Office
Administration.

• Promote a deep sense of nationalism and pride in the student’s own culture and national
identity.

The Department of Office Administration offers the following program: Bachelor of Science in
Office Administration major in Legal Transcription / Medical Transcription / Corporate
Transcription

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INTRODUCTION

Learning the language of the law is similar in some ways to learning a new language. At first,
many words and phrases may sound foreign to your ears and difficult to memorize. It is
nevertheless essential to understand their meaning and usage in order to carry out the most basic
legal functions. A more subtle difficulty lies in learning new ways to use familiar words and
phrases. For example, in legal terms the word court serves not only to refer to the judicial branch
of government or the place where legal disputes are decided. The term is used quite commonly
to refer to the judge and related administrative personnel involved in deciding a particular matter.
The term court may also signify all the judges in a district or country.

When dealing with legal matters or starting an education in law, there are basic terms that can
help you understand courtroom and legal documents. Legal wording can be very complex and
almost inaccessible if you do not have a basic knowledge of the important terms. Many people
consider legalese a separate language of its own, requiring specific training just to understand.
Much like learning a foreign language, developing a basic understanding of some of the essential
terms can help you navigate legal documents. Since legal terminology requires specific definitions
and wording, it's important to know the exact meaning of each term, even if they already seem
familiar.

REVIEW OF BASIC LEGAL TERMS

Processes in Court

There are several terms that are good to know regarding processes and practices in court.

Docket: An outline and documentation of what happens during a court case and all of its
proceedings.
Arraignment: One of the first court proceedings, where the defendant has to appear in court,
hear the listing of their crimes, and state whether they are not guilty or guilty. This determines the
rest of the court proceedings.
Deposition: A statement provided to an officer of the law or lawyer, which is usually used to
determine credibility and reliability of a witness.
Subpoena: A requirement by the court to show up and testify as needed. This is not a negotiable
demand. You must show up, otherwise you are going against the wishes of the court and can be
accused of a crime.
Example:
Mark received a subpoena from the court to show up for a deposition before the
arraignment was scheduled.

Judgement Terms

The first selection of terms has to do with words and phrases seen in the courtroom regarding
judgements on cases.

Acquit: Being found not guilty by a jury or judge, or the determination that there was not enough
evidence to convict beyond a reasonable doubt.
Guilty: Admitting to committing the crime.
Malpractice: A person who had a responsibility for care and ignored or completely
disregarded their responsibility.

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Negligence: A situation in which someone did not pay attention or take the requisite level of care.
Not-Guilty: A declaration of innocence, that a person did not commit the crime.
Not-Guilty by Reason of Insanity: Stating that the person was not in a mind to understand the
crime being committed.
No Contest: Neither admitting nor denying the crime, but an acceptance of the accusation.
Perjury: Lying under oath in court.

Example:
Melanie plead not-guilty to the crime of malpractice. She was eventually acquitted when it
was determined that the accuser committed perjury in court.

Legal Terms Used with Clients

Although many terms are used in the court and with clients, there is still some general terminology
that may be used in non-court settings.

Custodian: A guardian of a child who is responsible for money allocation.

Diligence: Opposite of negligence, this shows proper care of a subject or situation.
Easement: The permission that is provided to someone to access a piece of property in
perpetuity, such as for mineral rights.
Executor: An individual that is responsible for executing a will, or following the wishes of a will
and testament.
Good Faith: Behaviour and actions that are honest and not used to deceive or commit a crime.
Living Will: A document that is used like a will, but if the person is still alive but cannot make
decisions. For instance, if the person was in a coma.
Tort: A civil crime or issue.

Week 2-3

CHAPTER 1

STRUCTURE AND FUNCTIONS OF LEGAL SYSTEMS IN THE PHILIPPINES

Under the 1973 constitution, the Supreme Court, composed of a chief justice and 14 associate
justices, was the highest judicial body of the state, with supervisory authority over the lower courts.
The entire court system was revamped in 1981, with the creation of new regional courts of trials
and of appeals. Justices at all levels were appointed by the president. Philippine courts functioned
without juries. Delays in criminal cases were common, and detention periods in national security
cases were long. Security cases arising during the period of martial law (1972–81) were tried in
military courts. The 1987 constitution restored the system to what it had been in 1973. Despite
the reinstitution of many procedural safeguards and guarantees, the slow pace of justice
continues to be a major problem.

Currently, the national court system consists of four levels: local and regional trial courts; a
national Court of Appeals divided into 17 divisions; the 15-member Supreme Court; and an
informal local system for arbitrating or mediating certain disputes outside the formal court system.
A Shari'ah (Islamic law) court system, with jurisdiction over domestic and contractual relations
among Muslim citizens, operates in some Mindanao provinces. Supreme Court justices may hold
office, on good behavior, until the age of 70.

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The constitution calls for an independent judiciary and defendants in criminal cases are afforded
the right to counsel. The legal system is based on both civil and common law. It is especially
influenced by Spanish and Anglo-American laws. The Philippines accepts the compulsory
jurisdiction of the International Court of Justice.

An informal local system for arbitrating or mediating certain problems operates outside the formal
court system. There is no jury system. Defendants enjoy a presumption of innocence and have
the right to confront witnesses, to present evidence and to appeal.

Suggested Readings:

https://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-JUDICIAL-
SYSTEM.html#ixzz6jVXn3mzY

Nature of the Philippine Legal System

The Philippine legal system may be considered as a unique legal system because it is a blend of
civil law (Roman), common law (Anglo-American), Muslim (Islamic) law and indigenous law. Like
other legal systems, there are two main sources of law.

Sources of Law

There are two primary sources of the law:

1) STATUTES OR STATUTORY LAW. Statutes are defined as the written enactment of the
will of the legislative branch of the government rendered authentic by certain prescribed
forms or solemnities are more also known as enactment of congress. Generally, they
consist of two types, the Constitution and legislative enactments. In the Philippines,
statutory law includes constitutions, treaties, statutes proper or legislative enactments,
municipal charters, municipal legislation, court rules, administrative rules and orders,
legislative rules and presidential issuance.

2) JURISPRUDENCE - or case law - is cases decided or written opinion by courts and by

persons performing judicial functions. Also included are all rulings in administrative and
legislative tribunals such as decisions made by the Presidential or Senate or House
Electoral Tribunals.

With the advent of the new information technology, electronic or digitized sources are popular
sources of legal information for the following reasons:

a) updated legal information is readily available and

b) the search engines used facilitate research, and
c) no complete and update manually published search tools for statute and case law.

In finding the law, our ultimate goal is to locate mandatory primary authorities which have bearing
on the legal problem at hand. If these authorities are scarce or nonexistent, our next alternative
is to find any relevant persuasive mandatory authority. If our search is still negative, the next
alternative might be.

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Legal Terminology: General Terms

Analogize: To take the facts, rationale or argument of a written decision and explain how the
argument relates to your case/issue.
Citation: A reference to a legal precedent or authority (primary or secondary) such as a case,
statute or treatise. Case citation: The alpha numeric identifier provided to enable researchers to
locate written decisions. The format usually consists of a volume number, the abbreviated reporter
name, and a page or paragraph number. (e.g. 268 N.E.2d 1247)
Citators: A tool used in legal research to update legal authorities by listing their subsequent
history and treatment. Also provide additional research references to primary and secondary
resources citing your original document.
Civil Law: The body of law imposed by the state; the law of civil or private rights; a civil law
system relies on codes that provide explicit rules of a situation. A judge's decision in a civil law
system does not become binding or form a precedent. Many European countries are civil law
countries.
Constitution: A type of primary authority that is a set of principles that a country or state is
governed by. Constitutions generally establish the branches of government, the scope of powers
for each branch, and a set of guaranteed civil rights and civil liberties.
Criminal Law: The body of law defining offenses against the community at large, regulating how
suspects are investigated, charged and tried, and establishing punishment for convicted
offenders.
Court Rules: Rules that control the operation of the courts and the conduct of the litigants
appearing before the court.
Distinguishing an Authority: Taking the facts, rationale or arguments of a written decision or
other primary authority and showing the differences between that authority and your case, even
if on the surface they seem similar.
Federal Jurisdiction: A federal court's power to hear matters. Under this type of jurisdiction
federal courts may decide a question of civil and/or criminal federal law.
Index: An alphabetical listing of items (topics or names) available in the resource along with an
indication of where each item may be found within the work. This finding tool is available in both
print and electronic resources.
Hypothetical: Discussion of a legal principle based on a fictitious or assumed set of facts.
Mandatory (Binding) Authority: A primary legal authority that is binding on a court. Jurisdiction
and court level determine whether a primary legal authority is mandatory or persuasive.
Moot Court: A fictitious court held, usually in law schools, to argue hypothetical cases, especially
at the appellate level.
Persuasive Authority: A primary or secondary authority. The legal authority is not binding on a
court, but the court may still rely on the authority when making its determination. Jurisdiction and
court level determine whether a primary legal authority is persuasive or mandatory/binding.
Secondary authority is always only persuasive.
Pinpoint Citation: The page on which a quotation or relevant passage appears, as opposed to

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the page on which a case or article begins.
Procedural Law: Rules that describe the steps for having a right or duty judicially enforced, as
opposed to the law that defines the specific rights and duties themselves.
Primary Legal Authority: Authority that issues directly from a lawmaking body such as
constitutions, legislation, regulations, and the reports of litigated cases (court opinions) among
others.
Relevance: Relation or pertinence to the issue at hand.
Relief: The compensation (monetary or other- e.g., injunction) or benefit that a party asks of
another party, sometimes received through settlement and other times received through the
courts.
Secondary Legal Authority: Authority that explains the law but does not itself establish the law,
such as a treatise, annotation, or law review article among others.
State Jurisdiction: A state court's power to hear matters. Under this type of jurisdiction state
courts may decide a question of civil and/or criminal state law.
Socratic Method: A technique of law school instruction, whereby a professor questions one or
more students, building on each answer with another question.
Substantive Law: The part of the law that creates, defines and regulates the rights, duties and
powers of parties.
Table of Contents: Usually located at the beginning of the work, it provides a list of
chapters/sections within the work, often in outline form, and the page numbers where the topics
for each chapter/section begin. Some resources provide tables of contents for each chapter.
Electronic resources provide them through a separate link. This finding tool is available in both
print and electronic resources.
Uniform Laws: An unofficial law proposed as legislation for all the states to adopt exactly as
written, the purpose being to promote greater consistency among the states.

Assignment No. 1

1. Select 10 basic legal terms and use correctly in the sentence.

2. Discuss the importance of structure and functions of a legal system.

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Week 4

CHAPTER 2

How Law is Enacted in the Philippines

Bills are laws in the making. They pass into law when they are approved by both houses and the
President of the Philippines. A bill may be vetoed by the President, but the House of
Representatives may overturn a presidential veto by garnering a 2/3rds vote.

The Lawmaking Process in the Philippines

The bill is prepared.

The House of Representatives has its first reading.
A Committee Consideration/Action session is held.
The House of Representatives has its second reading.
The House of Representatives has its third reading.
The approved bill is transmitted to the Senate.
A conference committee is assembled.
The bill is transmitted to the President of the Philippines to be signed and passed.

Preparation of the Bill

As senators and representatives engage with their constituents, ideas for laws may come up. If
lawmakers decide that solutions to the concerns of their constituents can be addressed by
passing a law, they carefully study the ideas and write them into bills. Individuals and groups may
also draft bills and ask their lawmakers to file them in Congress.

First Reading

Once the bill is finalized, it is filed with the Bills and Index Service and is numbered and
reproduced. Three days after its filing, the proposed measure is included in the Order of Business
for First Reading in the session. The session hall is where all lawmakers convene for a plenary
session.

Committee Consideration/Action

After the referral of the bill, the committee where the bill was referred to will determine if there is
a need to conduct public hearings or not.

If yes: Should it be decided that there is a need to conduct a public hearing, the committee then
schedules the hearing, sends public notices containing the agenda as well as the time and venue
of the hearing, and invites relevant resource persons from the government and the private sector
and special interest groups to the meeting for their input.

If no: On the other hand, should it be decided by the committee that there is no need to conduct
a public hearing, they will just schedule the bill for committee discussions.
From the result of the public hearings or committee discussions, the bill may be amended,
consolidated (if there are other similar bills filed), or be substituted with another bill by the
committee.

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Second Reading

The Committee Report is registered and numbered by the Bills and Index Service and then
included in the Order of Business and referred to the Committee on Rules, which has jurisdiction
over all matters affecting the rules of the Senate or the House of Representatives, the calendar,
parliamentary rules, the order and manner of transacting business, and the creation of
committees. The Committee on Rules is headed by the Majority Leader of the Senate and the
House of Representatives as chairperson.

The bill is then scheduled for consideration on Second Reading. This is one of the most
challenging stages in passing a bill. During the Second Reading, the Secretary of the Senate or
the Secretary General of the House of Representatives reads the number, title, and text of the
bill.

Upon motion of the Majority Floor Leader, the floor will be opened for the Period of Sponsorship
and Debate wherein the Committee Chairman reads the Sponsorship Speech for the bill. This will
be followed by the interpellation or debate wherein the sponsor defends the merit of the proposed
bill before his or her colleagues in session.

Once the period of Sponsorship and Debate is closed, the Period of Amendments is opened,
wherein other lawmakers can propose the specific wordings, stylistics, and intents that they want
to be included in the final version of the bill. After the amendments, the bill’s approval for Second
Reading will be voted on by all legislators of the house. Voting can be done either by viva voce
(“aye” and "nay”), count by tellers, division of the house, or nominal voting.

Third Reading

After the Second Reading, the amendments proposed by the legislators are absorbed. Printed
copies of the bill are then reproduced for Third Reading. The bill is then included in the Calendar
of Bills for Third Reading and the copies are distributed to all the members three days before its
reading in the plenary.

If the bill got a majority vote, it is considered approved. If it got disapproved, it is transmitted to
the Archives of the Senate or the House of Representatives.

Transmittal of the Approved Bill to the Counterpart House

The Philippine Congress is a bicameral legislature composed of two co-equal houses: The House
of Representatives and the Senate. Thus, a bill cannot become a law unless each house has
given its nod on the proposed measure.

Once a bill is approved, for example, at the House of Representatives, it is then transmitted to the
Senate for its concurrence and undergoes the same process in the Senate. The same is also true
when the Senate passes a bill, it transmits it to the House of Representatives for its concurrence.

Conference Committee

Granting that the bill has also passed in the other house of Congress, there are instances when
the versions of both houses differ from each other. As entities that must produce a single output

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being one of its primary duties as the legislative branch of the Philippine government, both houses
will sit down with each other in a bicameral Conference Committee meeting.

The Conference Committee shall be composed of Members of the House of Representatives and
the Senate, who will “settle, reconcile or thresh out differences on any provision of the bill.”

Aside from reconciling the differences in each version of the bills, the members of the committee
may also introduce new, but relevant, provisions in the bill.

Transmittal of the Bill to the President of the Philippines

The approved bill, signed by the Speaker of the House of Representatives and the President of
the Senate and certified by the Secretary General of the House of Representatives and the
Secretary of the Senate, is transmitted to the Office of the President. The President has three
options on what to do with the bill:

Sign and pass the bill: The bill is assigned with a Republic Act number and becomes a law.
Veto the bill: By refusing to sign, the bill is sent back to the House of Representatives, along with
the reasons for the veto. If both houses of Congress decide that the bill or any of its vetoed
provisions should still become a law, they will separately hold a vote. If two-thirds (2/3) of the
members of both houses voted for support of the bill, the President’s veto is overridden. Therefore,
the bill becomes a law.

Assignment No. 2

1. Discuss briefly how law was enacted in the Philippines.

2. Enumerate at least 10 legal terminologies and use in the sentence.

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Week 5-6

CHAPTER 3

THE PHILIPPINE LAW

Civil Law

Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith. Article 20. Every person who,
contrary to law, willfully or negligently causes damage to another, shall indemnify the latter for the
same.

Whereas the criminal legal systems of most English-speaking countries are based on English
common law, those of most European and Latin American countries, as well as many countries
in Africa and Asia, are based on civil law. The civil-law tradition originated in the Law of the Twelve
In civil law the legislature, as the representative of the public, is viewed as the only valid source
of law. It attempts to provide a complete, detailed, and written legal code that is understandable
to the common citizen and applies in virtually all situations. Therefore, legal codes in civil-law
countries tend to be much lengthier than those in common-law countries, if indeed those countries
have them at all. The typical pattern in civil law includes a definition of an offense, various relevant
legal principles, and a list of specific applications of the law and specific exceptions. Judges are
expected to apply the law as it is written and generally are prohibited from engaging in the type
of interpretation that regularly occurs in common-law systems. If more than one law applies to a
case, or if the circumstances are such that the law’s application is unclear, then judges refer to
the legal principles that are contained in the law. Owing to the central role of the legislature in
developing the legal code, civil-law systems also generally lack the type of judicial review that in
common-law countries results in what is called case law (i.e., law that derives from judicial
interpretations of legislative statutes or the constitution).

Five Common Types of Civil Cases

The primary difference between civil litigation and criminal cases is that in civil cases one or both
of the parties is seeking money or another form of compensation rather than criminal charges. In
general, the prosecution in criminal cases represents the state in which the trial is taking place,
but in civil cases both parties represent themselves, with the assistance of a civil litigation attorney
or legal counsel. These are some of the most common types of cases to appear in civil court.

Contract Disputes

Contract disputes occur when one or more parties who signed a contract cannot or will not fulfill
their obligations. Occasionally, this is due to a contract that is written in fuzzy terms that creates
disparate expectations in the signers, but usually it is because one party overextends itself and
doesn’t have the money or employees to fulfill their obligations.

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Property Disputes

Property law involves disputes about property ownership and damages to one person’s property
or real estate. There are many different types of property disputes that a civil litigation attorney
may handle. One common one is property line disputes, in which one party alleges that a neighbor
crossed the property line boundary between their two homes for building or planting.

Torts

A tort is a civil case in which one party alleges that another caused them physical or emotional
harm. Tort cases can take many different forms, and can relate to a person’s personal safety,
safety of their property, and financial security. Common torts related to accident and injury include
assault or battery cases, and negligence cases in which one party alleges that a caregiver did not
do their assigned duty.

Damages in tort are generally awarded to restore the plaintiff to the position he or she was in had
the tort not occurred. In law, damages are an award, typically of money, to be paid to a person as
compensation for loss or injury. Damages are classified as compensatory (or actual) damages
and punitive damages.

Tort, in common law, civil law, and the vast majority of legal systems that derive from them, any
instance of harmful behavior, such as physical attack on one’s person or interference with one’s
possessions or with the use and enjoyment of one’s land, economic interests (under certain
conditions), honour, reputation, and privacy. The term derives from Latin tortum, meaning
“something twisted, wrung, or crooked.” The concept encompasses only those civil wrongs
independent of contracts.

Class Action Cases

Class action cases are similar to tort cases, only the prosecution in these cases represents a
group or class of people who have all been injured by the same thing. These are common in
cases of defective products or exposure to hazardous materials in which the faulty item injured
multiple people before it was recalled.

Complaints against the City

Complaints against the city or federal government are generally settled out of court, but in the
event that the government refuses to settle, the complaints are generally tried as civil cases.
These cases can be brought in any case where the plaintiff alleges that city law or policy has
caused harm to its citizens.

adjective law (or procedural law): That area of the law that deals with procedural rules of evidence,
pleadings and practice.

Administrative Law: The area of law that concerns government agencies.

cause of action: The reason for which a plaintiff files a complaint or suit against someone. This
can be negligence, breach of contract, malpractice or defamation, to name a few. A cause of
action is divided into elements, and each element must be proved to win the case.

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civil law: 1) A generic term for all non-criminal law, usually as it applies to settling disputes
between private citizens or entities. 2) A body of laws and legal concepts derived from Roman
law instead of English common law. (English common law is the basis of state legal systems in
the U.S., with the exception of Louisiana.)

compensatory damages: Damages that are recovered for injury or economic loss. For instance,
if someone is injured in a car accident and the party who injures them has to pay compensatory
damages, the party at fault must cover cost of things such as the ambulance, doctors’ bills,
hospital stays, medicine, physical therapy and lost wages.

constitutional law: Law prescribed by the written federal and state constitutions, as well as the
interpretation and implementation of this law.

contract: An agreement between two or more parties to do or refrain from doing something; this
often involves a promise of something in return for something of value. There are both written and
oral contracts, though in some states oral contracts have little or no standing.

demurrer (dee-muhr-ur): A formal response to a complaint filed in a lawsuit, pleading for dismissal
and saying, in effect, that even if the facts are true, there is no legal basis for a lawsuit. Examples
include a missing necessary element of fact, or a complaint that is unclear. The judge can agree
and “leave to amend,” giving the claimant the opportunity to amend the complaint. If it is not
amended to the judge’s satisfaction, the demurrer is granted. (Some states use a motion to
dismiss.)
There are numerous other types of civil cases, and sometimes a civil cases will follow up a criminal
case that has had an unfavorable outcome for the prosecution. If you think you may have ground
for a case, contact us at Brent George Law to discuss options.

depose: To testify or give under oath or sworn affidavit.

diligence: Reasonable care or attention to a matter; for instance, looking both ways before
proceeding after stopping at a stop sign, washing your hands before cooking food in a restaurant
or operating in a hospital or checking brakes and other mechanical components on tour buses at
regular intervals. Due diligence denotes what a normal, responsible person would do under the
same conditions.

felony: A serious crime punishable by death or at least one year in a state or federal prison.
Felonies include arson, rape, perjury and homicide. When theft is involved, the value of that which
was stolen determines whether the offense is considered a misdemeanor or felony.

laws: A system of regulations governing the conduct of a community, state, society or nation in
order to provide consistent order and justice. In the United States, laws can be statutes,
ordinances or regulations, and are usually enacted by the legislative branch at a state or federal
level, or by a branch of the government with authorization from a law already established.

malfeasance: Doing something illegal or morally wrong. Malfeasance includes dishonesty and
abuse of authority.

mens rea (menz ray-ah) Latin for a “guilty mind”; mens rea is used to describe a culpable state of
mind, the criminal intent of the individual when committing an criminal act. For some crimes, this
intent must have been present for a person to be guilty of the crime.

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misdemeanor: A crime less serious than a felony, punishable by or imprisonment for less than a
year.

prima facie (pry-mah fay-shah): Latin for “at first look,” or “on its face,” prima facie refers to what
can be presumed after the first disclosure.

prima facie case: A case where, upon first look, the facts themselves prove the case.

provisional remedy: A temporary court order to protect someone from further or irreparable
damage while further legal action is pending. For example, a temporary restraining order is a
provisional remedy to help keep someone safe until a hearing to decide if a permanent restraining
order is needed; likewise, a temporary injunction to stop the destruction of a building can keep it
from being destroyed while the court decides whether it is a landmark.

punitive damages: Damages awarded over and above compensatory damages for punishment.
If the act causing the injury was committed out of negligence or malice, punitive damages serve
not only as a punishment, but as an example or deterrent to others. It also helps put the injured
party on a level playing field. For instance, an individual who loses a leg when hit by a drunk driver
cannot be awarded a new leg, but a monetary award can help that person face the resultant
obstacles.

stare decisis: Latin for “to stand by things decided,” to adhere to precedents of earlier cases as
sources of law. When an issue has already been ruled upon by a court, other cases involving the
same issue must receive the same response from that court or lower courts.

statute: A written law passed by Congress or another legislative body.

title: The legal basis ownership of real or personal property or a document that serves as serves
as evidence of this ownership. Deeds for real estate, and titles for cars and boats are examples
of titles.

title abstract: A history of ownership that establishes the present state of a title.

title search: An examination of public records to determine the state of a title and confirm that the
seller of a property is its legal owner. A cloud on the title such as a lien, an unrecorded owner or
differing property descriptions on previous deeds can be a reason to cancel a purchase on a
property.

tort: From the French word for “wrong,” a tort is a wrongful or illegal act, whether intentional or
accidental, in which an injury occurs to another. An intentional tort may also be a crime, such as
battery, fraud or theft. Tort law is one of the largest areas of civil law.

wobbler: Sometimes referred to as a “felony wobbler,” a wobbler is a crime that can be classified
as either a felony or a misdemeanor. In some states, even if an offender is charged with a felony
in a wobbler case, the judge may have the authority to reduce the conviction to a misdemeanor.

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Learning Assessment/Quiz No. 1 (50 points)

Explain briefly the classification of Philippine Law. (15 points)

What is a civil law? Discuss briefly. (15 points)

Enumerate at least 20 legal terminologies from chapters 1-3. Define in the simplest way.

Week 7-8

CHAPTER 4

CRIMINAL LAW

The law is generally divided into two categories – civil and criminal law. This chapter will assist
the student in identifying the differences and similarities between them.

Crimes are set forth in criminal statutes, which describe the prohibited conduct, the mental state
or intent required for guilt, and the range of possible punishments. The specific acts that qualify
as criminal conduct will depend on a particular jurisdiction's laws, as will what the actual crime is
called.

Below you can find an alphabetical list of common crimes:

Aggravated Assault Racketeering / RICO

Insurance Fraud Disturbing the Peace
Aiding and Abetting / Accessory Rape
Kidnapping Domestic Violence
Arson Robbery
Manslaughter: Involuntary Drug Manufacturing and Cultivation
Assault / Battery Securities Fraud
Manslaughter: Voluntary Drug Possession
Attempt Sexual Assault
Medical Marijuana Drug Trafficking / Distribution
Bribery Shoplifting
MIP: A Minor in Possession DUI / DWI
Burglary Solicitation
Money Laundering Embezzlement
Child Abandonment Stalking
Murder: First-degree Extortion
Child Abuse Statutory Rape
Murder: Second-degree Forgery
Child Pornography Tax Evasion / Fraud
Open Container (of alcohol) Fraud
Computer Crime Telemarketing Fraud
Perjury Harassment

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 Conspiracy Theft
Probation Violation Hate Crimes
Credit / Debit Card Fraud Vandalism
Prostitution Homicide
Criminal Contempt of Court White Collar Crimes
Public Intoxication Identity Theft
Cyberbullying Wire Fraud
Pyramid Schemes Indecent Exposure
Disorderly Conduct

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Legal Terminology: Case Law

Appeal: To seek review by a higher court. (e.g. appeal trial court decisions to the appropriate
higher court; appeal appellate court decisions to the appropriate highest court.)
Appellant: One who brings the appeal of the lower court decision (the loser in the lower court).
Appellate Briefs: Written argument submitted to the appellate court in support of a position on
appeal (not the same as a case brief).
Appellee: One against whom the appeal is brought and must respond to the appeal (the winner
in the lower court). Also called respondent.
Case: Generally used in law to refer to the written decision of a court.
Case Law: All reported decisions within a jurisdiction. May consist of common law decisions as
well as judicial decisions interpreting statutes, regulations, constitutions etc.
Case Reporters: Court opinions that are gathered together and published in chronological
order. The books containing these cases are called case reporters. Even though most cases are
available online, they are still organized and cited to according to the print reporter system.
Cases are primary sources regardless of publication in an official or unofficial reporter, the case
decision is the primary source. Case reporters can be official or unofficial.

• Official Reporter: The governmentally approved publication reproducing reported cases

within a given jurisdiction. The official reporter is the reporter that should be cited when
submitting documents to the court.
• Unofficial Reporter: Reporters published by commercial publishers (West, Lexis, BNA)
in either print or online formats, reproducing the reported decisions within a given
jurisdiction. Commercially published reporters are considered unofficial reporters.

Citator: A tool used in legal research to update legal authorities by listing their subsequent
history and treatment. With case law, legal citators indicate when a case has been cited by a
later case, and what effect, if any, the later citation had on the original case. The three main
citators are Shepard's on Lexis, KeyCite on Westlaw and Bcite on Bloomberg Law.
Common Law: The body of judge-made law having no basis in statutes. NOTE: Case law that
interprets a statue is NOT common law.
Common Law Tradition: The basis for the American legal system where courts create rules
called common-law rules and those rules govern future cases in that particular area. For
example, Tort cases are governed by common law rules.
Concurring Opinion: A separate written opinion explaining a vote cast by one or more judges
in favor of the judgment reached, often on grounds different from those expressed in the opinion
explaining the judgment.
Defendant: A person sued in a civil proceeding or accused in a criminal proceeding.
Dicta: A comment by a court that is unnecessary to a decision and therefore not precedential.
There are several types of dicta in Black's. You do rely on judicial dictum, but dicta is actually
short for obiter dictum. Judicial dictum is considered binding by courts while obiter dictum is not.

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Digest: A case finding tool that organizes cases by subject. Within each subject digests provide
summaries of cases that discuss the law on that subject. Digests allow you to find cases on a
particular point of law in a particular jurisdiction. Online services also provide digests for
particular topics.
Dissenting Opinion: An opinion by one or more judges who disagree with the decision reached
by the majority.
Docket Number: Courts assign each newly filed action with a number. The number usually
refrences the year the case was commenced followed by a series of numbers or letters that
represent the type of action (civil, criminal, family court, etc.) or location of filing.
Federal Circuit Courts: The appellate court level in the federal court system. There are 13.
Federal District Courts: The trial court level in the federal court system. There are 94.
Headnote: A brief summary of a specific point of law decided in a case. Headnotes appear
before the judicial opinion, and are generally written by a publisher's editors. Headnotes are a
great research tool, but are not considered legal authority and should never be cited to.
Illinois Circuit Courts: The trial court level in the Illinois state court system. There are 24.
Illinois District Courts: The appellate court level in the Illinois state court system. There are 5.
Intermediate Appellate Courts: Appellate courts that are in the middle of the judicial hierarchy
in a jurisdiction, they are above the trial court and below the highest court/court of last resort.
Their opinions are binding on the courts below them (trial courts).
Judge: A public official appointed or elected to hear and decide legal matters in court.
Judiciary: The branch of government responsible for interpreting the laws and administering
justice; a body of judges.
Justice: A judge, especially of an appellate court.
Litigation: The process of carrying on a lawsuit; the lawsuit itself.
Litigator: A lawyer who prepares cases for trial as by conducting discovery and pretrial
motions, trying cases and handling appeals; a trial lawyer.
Litigant: A party to a lawsuit.
Majority Opinion: see Opinion.
Minority Opinion: see Opinion.
Official Reporter: see Case Reporter.
Opinion: The written decision of a court.

• Majority Opinion: An opinion joined in by more than half of the judges considering a
given case. One judge writes the opinion when a majority of judges agree with the
holding.
• Minority Opinion: An opinion by one or more judges who disagree with the decision
reached by the majority - also called a dissenting opinion.
• Concurring Opinion: A judge who voted with the majority opinion, but writes separately
because her reasoning is different.

Page | 20
 • Dissenting Opinion: A judge who writes a separate opinion where the reasoning and
the holding are different from the majority.
• Per Curiam Opinion: Literally "By the Court." This happens when the court issues a
unanimous opinion, typically on a controversial topic, so that no single author can be
identified.

Opinions, unpublished: An opinion is considered published unless it is specifically designated

as "unpublished." The court typically designates an opinion as "unpublished" if it doesn't add
anything new to the body of law. Courts have different rules about whether they will accept
citations to unpublished opinions.
Petitioner: A party who presents a petition to a court or other official body, especially when
seeking relief on appeal (where the Petitioner is the Appellant).
Plaintiff: The party who brings a civil suit in a court of law.
Precedent: A decided case that furnishes a basis for determining later cases involving similar
facts or issues.
Reporter: see Case Reporters.
Respondent: The party against whom an appeal is taken (appellee); the party against whom a
motion or petition is filed.
Slip Opinion: The opinion issued by the court as a stand-alone document on the day it is
decided, before it has been assigned a volume and page number in the official reporter.
Star Pagination: A device, typically one or more asterisks (*), used in in cases online to
designate differences in pagination of the case as it would appear in print in different reporters.
Stare Decisis: "To stand by things decided." An American legal system doctrine of precedent
under which it is necessary for a court to follow earlier judicial decisions when the same points
are again in litigation.
Supreme Court: This is the court of last resort, or the highest court in the judicial hierarchy. The
opinions of a supreme court are binding on all the courts below it (Trial and Appellate). Note that
some jurisdictions refer to the highest court as a Court of Appeals or Court of Last Resort, e.g.,
in New York State the Supreme Court is not the highest court in the state.
Syllabus/Synopsis: A summary of the case. It will usually describe the procedural posture
(how the case made it to to the court) and the holding. It is not part of the official opinion.
Table of Authorities: The list of primary authorities (cases, statutes, regulations, or
constitutions) and secondary authorities relied upon in the document you are viewing.
Trial Courts: Trial courts are at the bottom of the judicial hierarchy in a jurisdiction. They are
usually persuasive primary authority. Trial court opinions bind only the parties involved in the
case, other trial courts hearing similar cases are not bound by the opinions, and the appellate
courts in the jurisdiction are not bound by the trial court opinions.

Page | 21
Assignment No. 3

1. Select 15 commonly used legal terminologies in a case law and use in the sentence.

2. From the list of common crimes, identify what offences are bailable and non-bailable.

Week 9-10

CHAPTER 4

BUSINESS LAW

REPUBLIC ACT No. 5455

An Act to Require that the Making of Investments and the Doing of Business Within the Philippines
by Foreigners or Business Organizations Owned in Whole or in Part by Foreigners Should
Contribute to the Sound and Balanced Development of the National Economy on a Self-
Sustaining Basis, and for Other Purposes

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Section 1. Definitions and scope of this Act.— (1) As used in this Act, the term "investment" shall
mean equity participation in any enterprise formed, organized or existing under the laws of the
Philippines; and the phrase "doing business" shall include soliciting orders, purchases, service
contracts, opening offices, whether called "liaison" offices or branches; appointing representatives
or distributors who are domiciled in the Philippines or who in any calendar year stay in the
Philippines for a period or periods totaling one hundred eighty days or more; participating in the
management, supervision or control of any domestic business firm, entity or corporation in the
Philippines; and any other act or acts that imply a continuity of commercial dealings or
arrangements, and contemplate to that extent the performance of acts or works, or the exercise
of some of the functions normally incident to, and in progressive prosecution of, commercial gain
or of the purpose and object of the business organization.

(2) This Act shall not apply to banking institutions which are governed and regulated by the
General Banking Act and other laws.

Section 2. Permitted Investments.— (1) Without need of prior authority anyone not a Philippine
national as that term is defined in Section three of the Investment Incentives Act, and not
otherwise disqualified by law, may invest:

(a) In any enterprise registered under the Investment Incentives Act, to the extent that the total
investment of non-Philippine nationals therein would not affect its status as a registered enterprise
under that law;

(b) In any enterprise not registered under the Investment Incentives Act, to the extent that the
total investment of non-Philippine nationals therein shall not exceed thirty percent of the

Page | 22
outstanding capital of that enterprise, unless existing law forbids any non-Philippine ownership in
the enterprise or limits ownership by non-Philippine nationals to a percentage smaller than thirty
per cent.

(2) Within thirty days after notice of the investment received by it, the enterprise in which any
investment is made by a non-Philippine national shall register the same with the Board of
Investments for purposes of record. Investments made in the form of foreign exchange or other
assets actually transferred to the Philippines shall also be registered with the Central Bank. The
Board shall assess and appraise the value of such assets other than foreign exchange.

Section 3. Permissible Investments.— If an investment by a non-Philippine national in an

enterprise not registered under the Investment Incentives Act is such that the total participation
by non-Philippine nationals in the outstanding capital thereof shall exceed thirty per cent, the
enterprise must obtain prior authority from the Board of Investments, which authority shall be
granted unless the proposed investment

(a) Would conflict with existing constitutional provisions and laws regulating the degree of required
ownership by Philippine nationals in the enterprise; or

(b) Would pose a clear and present danger of promoting monopolies or combinations in restraint
of trade; or

(c) Would be made in an enterprise engaged in an area adequately being exploited by Philippine
nationals; or

(d) Would conflict or be inconsistent with the Investments Priorities Plan in force at the time the
investment is sought to be made; or

(e) Would not contribute to the sound and balanced development of the national economy on a
self-sustaining basis.

Investments made in the form of foreign exchange or other assets actually transferred to the
Philippines shall also be registered with the Central Bank. The Board shall assess and appraise
the value of such assets other than foreign exchange.

Section 4. Licenses to do business.— No alien, and no firm, association, partnership, corporation

or any other form of business organization formed, organized, chartered or existing under any
laws other than those of the Philippines, or which is not a Philippine national, or more than thirty
per cent of the outstanding capital of which is owned or controlled by aliens shall do business or
engage in any economic activity in the Philippines, or be registered, licensed, or permitted by the
Securities and Exchange Commission or by any other bureaus, office, agency, political
subdivision or instrumentality of the government, to do business, or engage in any economic
activity in the Philippines, without first securing a written certificate from the Board of Investments
to the effect;

(1) That the operation or activity of such alien, firm, association, partnership, corporation or other
form of business organization is not inconsistent with the Investments Priorities Plan;

(2) That such business or economic activity will contribute to the sound and balanced
development of the national economy on a self-sustaining basis;

Page | 23
(3) That such business or economic activity by the applicant would not conflict with the
Constitution or laws of the Philippines;

(4) That the field of business or economic activity is not one that is being adequately exploited by
Philippine nationals; and

(5) That the entry of applicant therein will not pose a clear and present danger of promoting
monopolies or combinations in restraint of trade.

Upon granting said certificate, the Board shall impose the following requirements on the alien or
the firm, association, partnership, corporation or other form of business organization that is not
organized or existing under the laws of the Philippines

(1) To appoint a citizen of the Philippines, of legal age, good moral character and reputation, and
sound financial standing, as resident agent, who shall be authorized to accept summons and
other legal process in behalf of the applicant;

(2) To establish an office in the Philippines and to notify the Securities and Exchange Commission
in writing of the applicant’s exact address and of every contemplated transfer thereof or of the
opening of new offices, at least fifteen days before the same are to be effected; and once effected,
not later than ten days afterwards;

(3) To bring assets into the Philippines to constitute the capital of the office or offices, of such kind
and value as the Board may deem necessary to protect those who may deal with the applicant,
and to maintain that capital unimpaired during the period it does business in the Philippines;

(4) To present prior proof that citizens of the Philippines and corporations or other business
organizations organized or existing under the laws of the Philippines are allowed to do business
in the contrary or individual state within a federal country of which applicant is a citizen or in which
it is domiciled: Provided, However, That if the state or country of domicile of the applicant imposes
on, or requires of, Philippine nationals other conditions, requirements or restrictions besides those
set forth in this Act, the Board of Investments shall impose the said other conditions, requirements
or restrictions on the applicant if, in its judgment, the imposition thereof shall foster the sound and
balanced development of the national economy on a self-sustaining basis;

(5) To submit to the Securities and Exchange Commission certified copies of applicant’s charter
and by-laws and all amendments thereto, if any, with their translation into an official language
within twenty days after their adoption or after the grant of the prescribed certificate by the Board
of Investments; and annually, of applicant’s financial statements showing all assets, liabilities, and
net worth and results of operations, setting out separately those pertaining to the branch office;

(6) To keep a complete set of accounting records with the resident agent, which shall fully and
faithfully reflect all transactions within the Philippines, and to permit inspection thereof by the
Securities and Exchange Commission, the Bureau of Internal Revenue, the Board of Investments
and, if a corporation, by the officers mentioned in Section fifty-four of the Corporation Law;

(7) To give priority to resident creditors as against non-resident creditors and owners or
stockholders in the distribution of assets within the Philippines upon insolvency, dissolution or
revocation of the license;

Page | 24
(8) To give the Securities and Exchange Commission at least six months advance notice in writing
of applicants’ intention to stop doing business within the Philippines; and to give such public notice
thereof as the Securities and Exchange Commission may require for the protection of resident
creditors and others dealing with the applicant; and

(9) Not to terminate any franchise, licensing or other agreement that applicant may have with a
resident of the Philippines, authorizing the latter to assemble, manufacture or sell within the
Philippines the products of the applicant, except for violation thereof or other just cause and upon
payment of compensation and reimbursement of investment and other expenses incurred by the
licensee in developing a market for the said products: Provided, However, That in case of
disagreement, the amount of compensation or reimbursement shall be determined by the court
where the licensee is domiciled or has its principal office who shall require the applicant to file a
bond in such amount as, in its opinion, is sufficient for this purpose.

The above requirement shall be in addition to those set forth in the Corporation Law, as amended,
for licensing foreign corporations and a violation of any of these requirements shall be sufficient
cause to cancel a license or permit issued pursuant to this Act: Provided, However, That this
section shall not apply to aliens or foreign firms, associations partnerships, corporations or other
forms of business organization not organized or existing under the laws of the Philippines who
may lawfully have been licensed to do business in the Philippines prior to the effectivity of this
Act; Provided, further, That where the issuance of said license has been irregular or contrary to
law, any person adversely affected thereby may file an action with the Court of First Instance
where said alien or foreign business organizations resides or has its principal office to cancel the
said license. In such cases, no injunction shall issue without notice and hearing; and appeals and
other proceedings for review shall be filed directly with the Supreme Court.

Section 5. Mergers and Consolidations.— The provisions of this Act shall apply to any merger,
consolidation, syndicate or any other combination of firms, associations, partnerships or other
forms of business organization that will result in ownership or control by persons or entities that
are not Philippine nationals of more than thirty per cent of the capital of whatever organization
results from the merger, consolidation, syndicate or other combination.

Section 6. Local Government Action.— No agency, instrumentality or political subdivision of the

Government shall take any action in conflict with or which will nullify the provisions of this Act, or
any certificate or authority granted thereunder.

Section 7. Publication and Posting of Notices.— Immediately after the filing of any application
under this Act, the Secretary of the Board of Investments shall publish the same at the expense
of the applicant once a week for three consecutive weeks in the Official Gazette and in one of the
newspapers of general circulation in the province or city where the applicant has its principal office
and post copies of said application in conspicuous places, in the office of the Board of Investments
or in the building where said office is located, setting forth in such copies the name of the
applicant, the business in which it is engaged or proposes to engage or invest, and such other
data and information as may be required by the Board of Investments. No approval or certificate
shall be valid without the publication and posting of notices as herein provided.

Section 8. Judicial Relief.— From any decision of the Board of Investments under this Act, or from
the failure of the Board of Investments to act on any application within sixty days from the date of
final publication of the application, the applicant or any person adversely affected thereby may
seek judicial relief in the Court of First Instance of Manila.

Page | 25
Section 9. Rules and Regulations.— The Board of Investments shall promulgate such rules and
regulations as may be necessary to enforce the intent and provisions of this Act. The rules and
regulations shall take effect thirty days after their publication in the Official Gazette and in two (2)
newspapers of general circulation in the Philippines.

Section 10. Penal Clause.— Any violation of this Act or of the requirements for a license to do
business within the Philippines shall be punished with a fine of not less than ten thousand pesos
and not more than twenty-five thousand pesos and imprisonment of not less than five years and
not more than ten years.1avvphi1 If the violation is committed by a corporation or association, the
penalty shall be imposed upon the president, director or directors, manager, managing partner,
or other official thereof responsible for such violation. Any alien violating or responsible for the
violation of this Act shall, upon completion of the service of sentence, be deported without any
further proceedings on the part of the Deportation Board. Any government official or employee
who aids, abets or connives with any person in violating this Act shall, in addition to the penalty
which may be imposed upon him as a principal, be perpetually disqualified from holding any public
office.

Section 11. Separability Clause.— If any part or section of this Act is declared unconstitutional for
any reason, whatsoever, such declaration shall not in any way affect the other parts or sections
of this Act.

Section 12. Repealing Clause.— All laws or parts of laws inconsistent herewith are hereby
repealed or modified accordingly.

Section 13. Appropriation.— The sum of one million pesos or so much thereof as may be
necessary, out of any funds in the National Treasury not otherwise appropriated, is hereby
authorized to be appropriated to carry out the provisions of this Act.

Section 14. Effectivity.— This Act shall take effect upon approval.

Approved: September 30, 1968.

The Lawphil Project - Arellano Law Foundation

Corporation

This Code shall be known as "The Corporation Code of the Philippines". Sec. ... - A corporation
is an artificial being created by operation of law, having the right of succession and the powers,
attributes and properties expressly authorized by law or incident to its existence.

There are several key positions required in all companies in the Philippines. In light of this, it is
important to familiarize yourself with the corporate structure in the Philippines.

In this article, we will discuss the requirements to hold key roles in a company. We will also
touch on the responsibilities of a company’s directors and corporate officers.

Page | 26
Corporate structure in the Philippines

There are two types of corporations in the Philippines, domestic corporations and one person
corporations. Regardless of the type, the corporate structure consists of the following:

• Shareholder(s)
• Director(s)
• Corporate Officers
•
o President
o Treasurer
o Corporate Secretary

An individual may hold more than one of the above roles in a company. We discuss
each of these in further detail below.

Shareholders in a Corporation in the Philippines

The table below shows the requirements for shareholders in the Philippines:

Type of Corporation Number of Directors Who can be a shareholder

Natural person
Partnership
Association
Domestic Corporation 2 to 15
Corporation

*foreign or local
Natural person
Trust
One person Corporation 1 Estate

*foreign or local

Foreigners can hold shares in a domestic corporation if the relevant industry allows for foreign
ownership. Similarly, a foreign investor can open a one person corporation if the industry allows
100% foreign ownership.

The percentage of allowed foreign ownership depends on the industry. Many industries allow for
full foreign ownership. However, there are a few which require majority Filipino ownership. The
table below shows examples of businesses that allow foreign ownership.

Page | 27
 Business/Industry Allowed foreign ownership
IT 100%
Lending business 100%
Agriculture 100%
Pharmaceutical 100%
Consultancy 100%
Telecom 40%
Real Estate (buying and selling of land) 40%
Private recruitment 25%

Liability of Shareholders in a Corporation in the Philippines

Shareholders of a corporation in the Philippines have limited liability. As such, they will
not be personally liable for the corporation’s debts. Should the company fail, their
personal assets will be safe. The extent of their liability is the same as the value of their
investment.

Directors in Philippine Corporations

The board of directors manages the corporation in accordance with the Corporation Code of the
Philippines. Shareholders vote and elect members of the board of directors. A director holds this
position usually for 1 year or until shareholders elect successors.

Qualifications of Directors

Aside from getting elected by shareholders, directors must also meet the following
requirements:

• A natural person
• Must be of legal age
• Must own at least 1 share
• Must not have been convicted of a criminal offense punishable by imprisonment
for a period exceeding 6 years
• Must not have violated the Corporation Code within five years prior to the date of
election

Because a director must also be a shareholder, there can be no more than 15 directors
in a corporation. For the same reason, foreign nationals can only hold the director role if
the industry allows full or partial foreign ownership. Note that in industries that only allow
partial foreign ownership, the majority of directors must be Filipino citizens.

Page | 28
Board of Directors’ Roles and Responsibilities

The board of directors can act on behalf of the corporation. They can perform tasks
including but not limited to the following:

• Make strategic decisions in the company;

• Make day-to-day decisions
• Appoint senior management

In line with their roles within the company, the board of directors must always act in good faith.
The board of directors must protect the interests of the corporation and its stockholders.
Members of the board cannot make decisions for their individual benefit. The board of directors
must also sure that the company follows legal and accounting requirements.

Corporate Officers in a Philippine Corporation

All corporations in the Philippines must have the following corporate officers. The board of
directors assigns the corporate officers.

President

The president acts as the signatory on behalf of the corporation. He or she reports to the board
of directors.

Requirements for the president of a corporation in the Philippines:

• A natural person
• Must be of legal age
• Must be a shareholder and director

There is only one shareholder in a one person corporation. As such, he or she must be the
president of the company.

A foreigner may hold this position provided that he or she meets all other requirements. The
president does not need to be a resident of the Philippines.

Corporate Secretary

The corporate secretary handles all of the corporation’s administrative and informative work.

The requirements for a corporate secretary:

• A natural person
• Must be of legal age
• Must be a Filipino citizen
•

Page | 29
Many corporate secretarial tasks involve maintaining compliance with local laws. The corporate
secretary is in charge of the following tasks:

• Documenting changes to the company’s share capital;

• Documenting election or resignation of directors;
• Preparing certifications of board resolutions;
• Authorizing documents circulating in the corporation

Your corporate secretary must be someone who is familiar with relevant laws and regulations in
the Philippines. You should not appoint someone just because they meet the citizenship and
residency requirements.

One way to fill this role is by outsourcing your corporate secretary. Our legal team will
take care of these tasks and ensure that you maintain compliance with local laws.

Partnership

A partnership is formed when two or more individuals own the business. The Civil Code of the
Philippines treats a partnership as a juridical person, which means its legal personality is separate
from that of its business owners. There are two kinds of partnership: general and limited.

Bankruptcy

Bankruptcy is a federal court process designed to help consumers and businesses eliminate their
debts or repay them under the protection of the bankruptcy court. Bankruptcy laws are designed
to protect and help people who can no longer pay their creditors in order to get a fresh start.

In every country there are business and commerce laws that every business owner and
entrepreneur should be aware of. In the Philippines, there are also laws and regulations that
govern businesses from registration, operation, up to termination. It is important that business
owners and entrepreneurs know what business laws are applicable to their type of business and
activities. These laws and rules should be followed to avoid punishments, charges and penalties
from the government or authorities that are implementing and enforcing them. Some of these laws
are not only created to obligate business owners to do their duties but they are also made to
obligate the government to protect these business owners. To make sure you are doing business
legally and to know the decrees that give your business protection and privileges, the following is
a list business laws in the Philippines that entrepreneurs should be aware of.

1. Tax Reform Act of 1997 (Republic Act No. 8424) –which amended the National Internal
Revenue Code (NIRC) is the law that governs the national taxation in the Philippines and
gives the Bureau of Internal Revenue (BIR) the power and duty to assess and collect national
internal revenue taxes in the country.

2. he Local Government Code of the Philippines (Republic Act No. 7160) – is the law governing
local taxation in the Philippines, including the taxation on real properties.

3. Labor Code of the Philippines (Presidential Decree No. 442) – is the law that governs
employment practices and labor relations in the Philippines.

Page | 30
4. Intellectual Property Code of the Philippines (R.A. 8293) – is the law that governs the
registration of patents, trademarks and copyright, and the enforcement of intellectual property
rights in the Philippines.

5. The Corporation Code of the Philippines (B.P. 68) – is the law that governs the registration
and regulation of corporations in the Philippines.

6. Civil Law of the Philippines (R.A. No. 386) – the civil code of the Philippines includes the laws
on obligations and contracts. It also governs special contracts such as contract of agency and
partnership.

7. Social Security Act of 1997 (R.A. No. 8282) – the law that mandates employers to register
their business and their employees with the Social Security System (SSS).

8. National Health Insurance Act of 1995 (R.A. No. 7875) – the act that mandates employers to
register their business and their employees with the Philippine Health Insurance Corporation
or PhilHealth. Home Development Mutual Fund Law of 2009 (R.A. No. 9679) – the act that
mandates employers to register their business and their employees with the Pag-Ibig Fund
(HDMF).

9. Food and Drug Administration (FDA) Act of 2009 (R.A. No. 9711) – the law that governs the
inspection, registration, licensing and monitoring of establishments and health products.

10. The Philippine Fisheries Code (R.A. No. 8550) – the law that governs commercial fishing in
the Philippines.

11. The Animal Welfare Act of 1998 (R.A. No. 8485) – the act that governs the supervision and
regulation of the establishment and operation of all facilities utilized for breeding, maintaining,
keeping, treating, or training of all animals in the Philippines.

12. Securities Regulation Code of the Philippines (R.A. No. 8799) – the law that governs the
registration and regulation of securities, pre-need plans, and securities market professionals
and the protection of shareholder interests in the Philippines.

13. Financing Company Act of 1998 (R.A. No. 8556) – the Act that governs the registration and
regulation of financial companies in the Philippines.

14. Truth in Lending Act (R.A. No. 3765) – An Act to Require the Disclosure of Finance Charges
in Connection with Extensions of Credit

15. Consumer Act of the Philippines (Republic Act No. 7394) – The law that protects the interest
of the consumers in the Philippines, promote their general welfare, and establish standards
of conduct for business and industry.

16. Electronic Commerce Act of 2000 (R.A. 8792) – an act providing for the recognition and use
of electronic commercial and non- commercial transactions, penalties for the unlawful use
thereof, and for other purposes.

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17. The Magna Carta for Micro, Small and Medium Enterprises (MSMEs), as amended (RA 9501)
– an Act to promote entrepreneurship in the Philippines by strengthening development and
assistance programs to Micro, Small and Medium Scale Enterprises in the country.

18. Barangay Micro Business Enterprises (BMBEs) Act of 2002 (R.A. No. 9178) – a law that
promotes the establishment of Barangay Micro Business Enterprises (BMBEs) in the
Philippines, and provides incentives and benefits such as income tax exemption and access
to financial, infrastructural, marketing, and knowledge support from the government.

19. Insurance Act of the Philippines, as amended – the law that governs the insurance business
and insurance transactions in the Philippines.

20. Foreign Investments Act of 1991 (R.A. No. 7042) – the law that governs foreign investments
in the Philippines.

21. Anti-Violence against Women and Children Act of 2004 (R.A. 9262) – a law that protects
women and children in the workplace.

22. Philippine Cooperative Code of 2008 (R.A. 9520) – the law governing the registration,
regulation and promotion of cooperatives in the Philippines.

23. Anti-Money Laundering Act of 2001 (RA 9160) – An Act that aims to protect and preserve the
integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be
used as a money laundering site for the proceeds of any unlawful activity.

24. The Anti-Red Tape Act of 2007 (RA 9485) – an act enacted to improve efficiency in the
delivery of government services to the public by reducing bureaucratic red tape, preventing
graft and corruption in all the offices of the government.

There are still other laws in the Philippines that are applicable to your specific business or industry
which I’ve missed to include above. Furthermore, there may be subsequent laws that the
Philippine government might enact in the future to partly or fully amend the laws listed above.
There will also be new laws that might be applicable to your business in the future and may affect
its operation. Hence, always be updated with the business related laws in the Philippines.
Remember that these laws are not only created to give you duties and responsibilities, but they
are also created to mandate the government or the state to protect and promote you and your
business.

In order to set up a corporation in the Philippines, the incorporation process is lodged with the
Securities & Exchange Commission (SEC).

Thus, the following documents must be submitted with the SEC:

1. Name Reservation/Verification Slip

2. Cover Sheet

3. Articles of Incorporation

4. Corporate By-laws

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5. Treasurer’s Affidavit

6. Registration Data Sheet

7. Registration Data Sheet (CAPITAL STOCK / INCORPORATORS /DIRECTORS / OFFICERS

INFORMATION)

Anent the documents, the following information must be supplied to adequately fill out the
necessary documents for submission with the SEC:

1. Corporate Name (must end in Inc., Corporation or OPC)

2. Purpose of the Corporation;
3. Address/Telephone Number/E-mail of the Corporation;
4. Term of existence of the Corporation (default term is perpetual existence);
5. Names, nationalities, and residences of the incorporators (can be a person, partnership
or corporation) not exceeding fifteen (15) in number;
6. Number of directors, which should not be more than 15;
7. Names, nationalities and residences of the persons who shall acts as directors until the
first regular directors are duly elected and qualified in accordance with the Corporation
Code;
8. The amount of the authorized capital stock of the Corporation, which must be stated in
Philippine Pesos, and the number of shares into which it is divided, In case the shares
are par value shares, the par value of said shares (usually P100.00 per share);
9. Names, nationalities and residences of the original subscribers, and the amount
subscribed and paid by each on his subscription;
10. Taxpayer’s Identification Numbers (TIN) of the incorporators;
11. For incorporators who are non-residents of the Philippines, the Passport Number of each
incorporators, and the date and place of issuance thereof;
12. Birthdays of the incorporators;
13. Preferred date of Annual Stockholders’ Meeting, e.g. any day in May of each calendar
year; and
14. Accounting year of the Corporation (fiscal or calendar year)

The Corporation Code requires that the incorporators be not more than fifteen (15). In
addition, the incorporators must own or be a subscriber of at least one (1) share of the capital
stock of the corporation. Please note that the Treasurer must be a resident of the Philippines
while the Corporate Secretary must both be a resident and citizen of the Philippines. Furthermore,
the President CANNOT serve concurrently as secretary or treasurer.

SEC FILING FEES

The SEC filing fees for the incorporation of a domestic corporation are as follows:

1. Basic Filing Fee for the Articles of Incorporation – 1/5 of 1% of the authorized capital
stock or the subscription price of the subscribed capital stock, but not less than
P2,000.00
2. Legal Research– 1% of the filing fee

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 3. Examining and Filing Fee for the By-Laws – P1,010.00
4. Cost and registration of the Stock & Transfer Book – P470.00

It would approximately take 2 – 3 weeks for the SEC to examine the documents and
correspondingly issue a Certificate of Incorporation.

As for reportorial requirements with the SEC, the General Information Sheet of the Corporation
must be filed within thirty (30) days after the date of the annual meeting of the stockholders of
the Corporation and its Audited Financial Statements, duly stamped received by the BIR, within
one hundred twenty (120) days after the end of the fiscal year of the Corporation as specified in
its By-Laws.

Assignment No. 4

Enumerate and explain at least 10 legal terminologies commonly used in the

Business law.

Week 11-12

CHAPTER 5

LABOR LAW

The Labor Code of the Philippines is a legal code that determines all employment practices and
labor relations in the Philippines. This is to help protect employees and employers- while ensuring
that neither is subject to unfair treatment or exploitation. No employee in the Philippines must
work for over 8 hours a day.

An understanding of existing labor law regulations and working conditions is essential for an
investor to succeed in the personnel management of his enterprise in the Philippines. In the past,
labor unrest (such as strikes and other concerted actions) has been blamed for closures and
withdrawals of investments in the country. However, in most of these cases, management was ill
prepared to handle industrial relations problem within the context of labor situation in the
Philippines.

It is downright wrong for a foreign investor to assume that working conditions in Philippines are
the same as in the home country. Philippine laws, culture, tradition, unionism, community relations
among other factors must be considered. Once understood, harmonious industrial relations will
be easy to establish in a company.

The main body of labor laws and social legislation is found in the Labor Code of the Philippines
(Presidential Decree 442). Although employment laws are supposed to be balanced both for labor
and management, such is not the case in the Philippines. Labor laws and procedures are tilted in
favor of the worker under the social justice principle that those who have less in life should have
more in law. For this reason, employers must act with caution in hiring, supervision, discipline and
firing of workers.

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State Policy on Labor
The State shall afford protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between workers and
employers. The State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work.

Security of Tenure
Once hired, an employee enjoys security of tenure. An employee can be dismissed from service
if there is (a) just cause and (b) after observance of due process by the employer. The absence
of any one of these requisites will result to an illegal dismissal and the employee may sue for
damages, back wages and reinstatement to his position without loss of seniority and privileges.

An employer may terminate employment in case of serious misconduct or willful disobedience,

gross and habitual neglect, fraud or willful breach of trust, commission of a crime against the
employer, and other offenses by the employee. Employment may also be terminated in case of
disease contracted by the employee or in case of closure of business establishment and or
reduction of personnel.

The employer must observe due process in disciplining employees or terminating their service.
They must be given notice of the nature of offense or accusation (First Notice), be given an
opportunity to be heard in a company-conducted investigation and be informed of the judgment
after the investigation (Second Notice).

On the other hand, an employee may terminate employer-employee relationship even without a
just cause by giving him a 30-day advance notice. There is no need for the advance notice in
case the employer subjected the employee to serious insult, inhuman and unbearable treatment.
The right of the employee to security tenure applies even when he is on probationary status. A
maximum probationary employment period of six months is provided. An employee who is allowed
to work after a probationary period shall be considered a regular employee.

PRE-EMPLOYMENT Art. 12. Statement of objectives. It is the policy of the State:

a. To promote and maintain a state of full employment through improved manpower training,
allocation and utilization;

b. To protect every citizen desiring to work locally or overseas by securing for him the best
possible terms and conditions of employment;

c. To facilitate a free choice of available employment by persons seeking work in conformity with
the national interest;

d. To facilitate and regulate the movement of workers in conformity with the national interest;

e. To regulate the employment of aliens, including the establishment of a registration and/or work
permit system;

f. To strengthen the network of public employment offices and rationalize the participation of the
private sector in the recruitment and placement of workers, locally and overseas, to serve
national development objectives;

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g. To insure careful selection of Filipino workers for overseas employment in order to protect the
good name of the Philippines abroad.

RECRUITMENT AND PLACEMENT OF WORKERS

GENERAL PROVISIONS Art. 13. Definitions. a. "Worker" means any member of the labor force,
whether employed or unemployed. b. "Recruitment and placement" refers to any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not: Provided, That any person or entity which, in any manner,
offers or promises for a fee, employment to two or more persons shall be deemed engaged in
recruitment and placement. c. "Private fee-charging employment agency" means any person
or entity engaged in recruitment and placement of workers for a fee which is charged, directly
or indirectly, from the workers or employers or both. d. "License" means a document issued
by the Department of Labor authorizing a person or entity to operate a private employment
agency. e. "Private recruitment entity" means any person or association engaged in the
recruitment and placement of workers, locally or overseas, without charging, directly or
indirectly, any fee from the workers or employers.

e. "Authority" means a document issued by the Department of Labor authorizing a person or

association to engage in recruitment and placement activities as a private recruitment entity.

f. "Seaman" means any person employed in a vessel engaged in maritime navigation.

g. "Overseas employment" means employment of a worker outside the Philippines. i.

"Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by
virtue of an immigrant visa or resident permit or its equivalent in the country of destination.

Employment promotion. The Secretary of Labor shall have the power and authority: a. To
organize and establish new employment offices in addition to the existing employment offices
under the Department of Labor as the need arises; b. To organize and establish a nationwide job
clearance and information system to inform applicants registering with a particular employment
office of job opportunities in other parts of the country as well as job opportunities abroad; c. To
develop and organize a program that will facilitate occupational, industrial and geographical
mobility of labor and provide assistance in the relocation of workers from one area to another;
and d. To require any person, establishment, organization or institution to submit such
employment information as may be prescribed by the Secretary of Labor.

Below are sets of rules that make up the Labor Code:

Working Hours in the Philippines

No employee in the Philippines must work for over 8 hours a day. He is worthy of a 1-hour lunch
break daily, without fail. However, a worker is only required to work for a maximum of 8 hours per
day from the office. There are no laws that mandate his working hours from home. Working hours
include the time during which the employer is required to be at the workplace, all hours that he is
asked to work, and the breaks in between to avoid burnout.

Employees Exempt from Completing Working Hours

Article 82 of the Labor Code states that employees under all establishments and undertakings
need to complete a certain set of working hours, except:

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Government employees
Managerial employees
Field personnel
Family members of the employer who are dependent for support
Domestic help
Individuals who provide personal service to others
Workers given wages/salary based on the Secretary of Labor regulations
Meal Times
The Labor Code dictates that all employers must get no less than a 60-minutes break to finish
their meals. The usual time during day-shifts is 12.00 PM.

Night Shift
In case an employer requires a worker to work during the night- any time between 10:00 PM and
6:00 AM- he must be paid a minimum of 10% over and above his regular wage for each hour.

Rules for Overtime Work

Since the maximum work hours allowed in the Philippines are 8-hours, in case an employee works
for longer, he must be paid extra. This includes additional compensation of 25% of his regular
work wage.

The employer is liable to pay an additional compensation equivalent to the average 8-hour pay,
including 30% more if he has asked his employee to work beyond 8-hours on a holiday or rest
day. Working on a rest day may be required in case of an emergency, urgent work, loss to the
business, or as determined by the Secretary of Labor and Equipment.
It is essential to note that an employee can be asked to perform overtime work in national or local
emergency cases determined by the state, or if the business is at stake.

Rules for Under-time Work

According to the Article 88 of the Labor Code, under-time work on a business day will not influence
overtime work on any given day. This means that if an employee leaves work early, he cannot be
made to work overtime the next day to make up for those hours. This is because the rate of
overtime per hour is higher than the missed hours.

The Labor Code also states that in case an employee receives permission to take leave on a
specific day, his employer is still required to pay for any additional compensation or overtime work
done previously or in the future.

Leaves
All employers are subject to a weekly rest day of a full 24-hours after every 6 consecutive working
days. The specific rest day can be mutually decided. However, an employee can argue his case
if he prefers to be given a rest day based on a religious event or holiday.

All workers reserve the right of holiday pay. This will include his regular daily wage. In case they
are called into work on a holiday, they must be paid twice their regular rate.

If an employee has worked for a minimum of one year for his company, he must be offered a
yearly service incentive leave of five days with regular pay.

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Common Legal Terminology in Business Law

Advisory Arbitration: Investigation of labor-management disputes where a report is issued

describing the dispute and recommendations for a solution. Also referred to as Non-Binding
Arbitration and Fact Finding.

Agency Employee: An agency employee is one who pays the union an agency fee in lieu of
regular union dues.

Agency Fee: A fee paid to the union by members of the bargaining unit who have not joined the
union. This fee is considered compensation to the union because the union must represent all
employees regardless whether they are members or not. Also referred to as Fair Share Fees.

Agency Shop: A union security clause that requires a bargaining unit employee to pay a service
fee equal to union dues even though the employee chooses not to join the union.

Alter Ego: Latin phrase meaning another self. An alter ego company may result when the same
owner and manager of one company shuts down operations and reopens doing the same thing
but with a new name. Alter ego companies are generally formed to avoid union obligations, but
rarely succeed at their mission. Alter ego, joint employer, and successor employer are frequently
confused as being the same thing although they are legally distinct from each other.

Attrition: Reduction in labor force of a company through natural causes such as voluntary quit,
retirement, or death, instead of firing or laying off employees. Attrition levels could play significant
role in union majority status and pension withdrawal liability.

Automation: The replacement of manual work with mechanical devices or new machines.

Collective Bargaining: Negotiation procedure where union members, through their elected
bargaining committee, deal as a group to determine wages, hours, and other terms and conditions
of employment. The bargaining committee, represented by the union and oftentimes its attorneys,
meets with management representatives and oftentimes management’s attorneys, to negotiate a
collective bargaining agreement.

Assignment No. 5

Enumerate and discuss (15) other legal terminologies commonly used in Philippine labor laws.

If you are an employee of a certain company, what are your views about the importance of Labor
Law in the Philippines.

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Week 14-15

CHAPTER 6

JUDICIAL SYSTEM OF THE PHILIPPINES

A barangay (/bɑːrɑːŋˈɡaɪ/; abbreviated as Brgy. or Bgy.), sometimes referred to by its archaic

name barrio (abbreviated as Bo.), is the smallest administrative division in the Philippines and is
the native Filipino term for a village, district, or ward.

Judicial power rests with the Supreme Court and the lower courts, as may be established by law
(Art. VIII, sec. 1). The judiciary enjoys fiscal autonomy. Its appropriation may not be reduced by
the legislature below the appropriated amount the previous year (Art. VIII, sec. 2). The Rules of
Court of the Philippines as amended and the rules and regulations issued by the Supreme Court
define the rules and procedures of the Judiciary. These rules and regulations are in the form of
Administrative Matters, Administrative Orders, Circulars, Memorandum Circulars, Memorandum
Orders and OCA Circulars. To inform the members of the Judiciary, legal profession and the
public of these rules and regulations, the Supreme Court disseminates this rules and regulations
to all courts, publishes important ones in newspapers of general circulation, prints in book or
pamphlet form and now downloads them in the Supreme Court website and the Supreme Court
E-Library website.

Department of Justice Administrative Order No. 162 dated August 1, 1946 provided for the Canon
of Judicial Ethics. Supreme Court of the Philippines promulgated a new Code of Judicial Conduct
for the Philippine Judiciary effective June 1, 2004 (A.M. No. 03-05-01-SC), which was published
in two newspapers of general circulation on May 3, 2004 (Manila Bulletin & Philippine Star) and
available on its website and the Supreme Court E-Library website.

The Supreme Court promulgated on June 21, 1988 the Code of Professional Responsibility for
the legal profession. The draft was prepared by the Committee on Responsibility, Discipline and
Disbarment of the Integrated Bar of the Philippines.

A Code of Conduct for Court Personnel (A.M. No. 03-06-13-SC) was adopted on April 13,
2004, effective June 1, 2004, published in two newspapers of general circulation on April 26,
2004 (Manila Bulletin & Philippine Star) and available at its website and the Supreme Court E-
Library website.

Supreme Court of the Philippines

The barangay chiefs exercised judicial authority prior to the arrival of Spaniards in 1521. During
the early years of the Spanish period, judicial powers were vested upon Miguel Lopez de Legaspi,
the first governor general of the Philippines where he administered civil and criminal justice under
the Royal Order of August 14, 1569.

The Royal Audencia was established on May 5, 1583, composed of a president, four oidores
(justices) and a fiscal. The Audencia exercised both administrative and judicial functions. Its
functions and structure were modified in 1815 when its president was replaced by a chief justice
and the number of justices was increased. It came to be known as the Audencia Territorial de
Manila with two branches, civil and criminal. Royal Decree issued July 24, 1861 converted it to a
purely judicial body wherein its decisions were appealable to the Supreme Court of the Philippines

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to the Court of Spain in Madrid. A territorial Audencia in Cebu and Audencia for criminal cases in
Vigan were organized on February 26, 1898. The Audencias were suspended by General
Wesley Merrit when a military government was established after Manila fell to American forces in
1898. Major General Elwell S. Otis re-established the Audencia on May 29, 1899 by virtue of
General Order No. 20. Said Order provided for six Filipino members of the Audencia. Act No.
136 abolished the Audencia and established the present Supreme Court on June 11, 1901 with
Cayetano Arellano as the first Chief Justice together with associate justices, the majority of whom
were American. Filipinization of the Supreme Court started only during the Commonwealth, 1935.

Administrative Code of 1917 provided for a Supreme Court with a Chief Justice and eight
associate Justices. With the ratification of the 1935 Constitution, the membership was increased
to 11 with two divisions of five members each. The 1973 Constitution further increased its
membership to 15 with two (2) divisions.

Pursuant to the provisions of the 1987 Constitution, the Supreme Court is composed of a Chief
Justice and fourteen Associate Justices who shall serve until the age of seventy (70). The Court
may sit En Banc or in its three (3) divisions composed of five members each. A vacancy must be
filled up by the President within ninety (90) days of occurrence.

Article VIII, sec. 4 (2) explicitly provides for the cases that must be heard En Banc and sec. 4 (3)
for cases that may be heard by divisions. (Constitution, Art. VIII, sec. 4, par.1) Judiciary
Reorganization Act of 1980 transferred from the Department of Justice to the Supreme Court
the administrative supervision of all courts and their personnel. This was affirmed by Art. VIII,
sec. 6 of the 1987 Constitution. To effectively discharge this constitutional mandate, The Office
of the Court Administrator (OCA) was created under Presidential Decree No. 828, as mended by
Presidential Decree No. 842, and and its functions further strengthened by a Resolution of the
Supreme Court En Bans dated October 24, 1996. Its principal function is the supervision and
administration of the lower courts throughout the Philippines and all their personnel. It reports
and recommends to the Supreme Court all actions that affect the lower court management. The
OCA is headed by the Court Administrator, three (3) Deputy Court Administrators and three (3)
Assistant Court Administrators.

According to the 1987 Constitution, Art. VIII, sec. 5, The Supreme Court exercises the following
powers:

Exercise jurisdiction over cases affecting ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court
may provide final judgments and orders of lower courts in:

All cases ion which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or
regulation is in question.

All cases involving the legality of any tax, impost, assessment, or toll, or any penalty
imposed in relation thereto.

All cases in which the jurisdiction of any lower court is in issue.

All criminal cases ion which the penalty imposed is reclusion Perpetua or higher.

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 All cases in which only an error or question of law is involved.

Assign temporarily judges of lower court to other stations as public interest may require.

Such temporary assignment shall not exceed six months without the consent of the judge
concerned.

Order a change of venue or place of trial to avoid a miscarriage of justice.

Promulgate rules concerning the protection and enforcement of constitutional rights,

pleading, practice, and procedure in all courts, the admission to the practice of law, the Integrated
Bar, and legal assistance to the underprivileged. Such rules shall provide a simplified and
inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts the same
grade, and shall not diminish, increase or modify substantive rights. Rules of procedure of special
courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.

Appoint all officials and employees of the Judiciary in accordance with the Civil Service Law (Sec.
5 , id.).

CITY COURTS

The Second Level Courts

Regional Trial Courts are also known as Second Level Courts, which were established among
the thirteen judicial regions in the Philippines consisting of Regions I to XII and the National Capital
Region (NCR). There are as many Regional Trial Courts in each region as the law mandates.
RTCs were formerly called as the Court of First Instance since the Spanish era. It was only in the
Judiciary Reorganization Act of 1980 that its name was changed from being called the Court of
First Instance to Regional Trial Court.

Regional Trial Courts

They are called the second level courts and are divided into thirteen (13) judicial regions: National
Capital Region (Metro Manila) and the twelve (12) regions of the country, which are divided into
several branches. The jurisdictions are defined in sec. 19-23 of Batas Pambansa Blg. 129 as
amended by Republic Act No. 7671. The Supreme Court designates certain branches of regional
trial courts as special courts to handle exclusively criminal cases, juvenile and domestic relations
cases, agrarian cases, urban land reform cases which do not fall under the jurisdiction of quasi-
judicial bodies. The Supreme Court issues resolutions designating specific branches of the
Regional Trial Courts as special courts for heinous crimes, dangerous drugs cases, commercial
courts and intellectual property rights violations. Special rules are likewise promulgated. A.M. No.
00-8-10-SC is a resolution of the Court En Banc on the Rules of Procedure on Corporate
Rehabilitation. The Interim Rules was promulgated in November 2000 and December 2008
affects special commercial courts. Some Regional Trial Courts are specifically designated to try
and decide cases formerly cognizable by the Securities and Exchange Commission (A.M. No. 00-
11-030SC)

Some branches of the Regional Trial Courts have been designated as family courts (A.M. No. 99-
11-07) because the family courts to be established pursuant to Republic Act No. 8369 of the
Family Court Law of 1997 have not yet been organized. Pursuant to Republic Act No. 8369, the

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Family Court Law of 1997, some branches of the Regional Trial Courts have been designated as
family courts (A.M. No. 99-11-07).

The Regional Trial Courts’ jurisdictions are defined as follows:

Exercise exclusive original jurisdiction in Civil Cases as follows:

o All civil actions in which the subject of the litigation is incapable of pecuniary
estimation;

o All civil actions which involve the title to, or possession of real property, or any
interest therein, where the assessed value of the property involved exceeds twenty
thousand pesos (P 20,000.00) or, civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (P 50,000.00) except actions for forcible entry into
and unlawful detainer of lands or buildings, original jurisdiction over which is
conferred upon the MeTCs, MTCs, and MCTCs;

o All actions in admiralty and maritime jurisdiction where the demand or claim
exceeds one hundred thousand pesos (P 100,000.00) or, in Metro Manila, where
such demand or claim exceeds two hundred thousand pesos (P 200,000.00);

o All matters of probate, both testate and intestate, where the gross value of the
estate exceeds One hundred thousand pesos (P 100,000.00) or, in probate
matters in Metro Manila, where such gross value exceeds Two hundred thousand
pesos (P 200,000.00);

o All actions involving the contract of marriage and marital relations;

o All cases not within the exclusive jurisdiction of any court, tribunal, person or
body exercising judicial or quasi-judicial functions;

o All civil actions and special proceedings falling within the exclusive original
jurisdiction of a Juvenile and Domestic Relations Court and of the Court of Agrarian
Relations as now provided by law; and

o All other cases in which the demand, exclusive of interest, damages of whatever
kind, attorney’s fees, litigation expenses and costs or the value of the property in
controversy exceeds One hundred thousand pesos (P 100,000.00) or, in such
other cases in Metro Manila, where the demand, exclusive of the above-mentioned
items exceeds Two hundred pesos (P 200,000.00) (Sec. 19, Batas Pambansa Blg.
129, as amended by R.A No. 7691).
Exercise original jurisdiction in other cases as follows:

• The issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus,
and injunction which may be enforced in any part of their respective regions; and

• Actions affecting ambassadors and other public ministers and consuls.

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They shall exercise appellate jurisdiction over MeTCs, MTCCs, MTCs, and MCTCs in their
respective territorial jurisdiction.
Metropolitan Trial Courts (MeTC), Municipal Trial Courts in Cities (MTCC), Municipal Trial Courts
(MTC) and Municipal Circuit Trial Courts (MCTC)
These are called the first level courts established in each city and municipality. Their jurisdiction
is provided for by section 33, 35 of Batas Pambansa Blg 129. Their jurisdiction has been
expanded by special laws namely Republic Act Nos. 9276, 9252, 9305, 9306, and 9308.
MeTCs, MTCCs, MTCs, and MCTCs shall exercise original jurisdiction in Civil Cases as provided
for in section 33 of Batas Pambansa Blg. 129 is as follows:

• Exclusive original jurisdiction over civil actions and probate proceedings, testate
and intestate, including the grant of provisional remedies in proper cases, where the value
of the personal property, estate or amount of the demand does not exceed One hundred
thousand pesos (P 100,000.00) or, in Metro Manila where such personal property, estate
or amount of the demand does not exceed Two hundred thousand pesos (P 200,000.00),
exclusive of interests, damages of whatever kind , attorney’s fees, litigation expenses, and
costs the amount of which must be specifically alleged: Provided, That interests, damages
of whatever kind, attorney’s fees, litigation expenses and costs shall be included in the
determination of the filing fees. Provided further, That where there are several claims or
causes of action between the same or different parties embodied in the same complaint,
the amount of the demand shall be the totality of the claims in all the causes of action
arose out of the same or different transactions;

• Exclusive original jurisdiction over cases of forcible entry and unlawful detainer:
Provided, That when, in such cases, the defendant raises the question of ownership in his
pleadings and the question of ownership in his pleadings and the question of possession
cannot be resolved without deciding the issue of ownership, the issue of ownership shall
be resolved only to determine the issue of possession; and

• Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty thousand pesos (P 20,000.00) or, in civil actions
in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P
50,000.00) exclusive of interest, damages of whatever kind, attorney’s fees, litigation
expenses and costs: Provided, That in cases of land not declared for taxation purposes
the value of such property shall be determined by the assessed value of the adjacent lots
(Sec. 33, Batas Pambansa Blg. 129).

Section 33 of Batas Pambansa Blg. 129 provides that the Supreme Court may designate
MeTCs, MTCCs, MTCs, and MCTCs to hear and determine cadastral or land registration
cases where the value does not exceed one hundred thousand pesos (P100,000.00).
Their decision is can be appealed in the same manner as the Regional Trial Courts.

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 The MeTCs, MTCCs, MTCs, and MCTCs are empowered to hear and decide petitions for
a writ of habeas corpus or applications for bail in criminal cases in the province or city in
the absence of the Regional Trial Court Judges.

By virtue of A.M. No. 08-8-7-SC, enacted September 9, 2008 and effective October 1-
2008, the Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts
and Municipal Circuit Trial Courts were designated to try small claims cases for payment
of money where the value of the claim does not exceed One Hundred Thousand Pesos
(P100,000.00) exclusive of interest and costs. These courts shall apply the rules of
procedure provided in A.M. No. 08-8-7-SC in all actions “which are: (a) purely civil in nature
where the claim or relief prayed for by the plaintiff is solely for payment or reimbursement
of sum of money, and (b) the civil aspect of criminal actions, either filed before the
institution of the criminal action, or reserved upon the filing of the criminal action in court,
pursuant to Rule 111 of the Revised Rules Of Criminal Procedure.”

Shari’a Courts

These special courts were created by sec. 137 of Presidential Decree No. 1083 or the
Code of Muslim Personal Laws. The judges should possess all the qualifications of a
Regional Trial Court Judge and should also be learned in Islamic law and jurisprudence.
Articles 143, 144, and 155 of Presidential Decree No. 1083 provides the jurisdiction of the
said courts as follows:

Shari’a District Courts (SDC) as provided for in paragraph (1), Article 143 of Presidential
Decree No. 1083, shall have exclusive jurisdiction over the following cases:

• All cases involving custody, guardianship, legitimacy, paternity and filiations arising
under the Code;

• All cases involving disposition, distribution and settlement of the estates of deceased
Muslims, probate of wills, issuance of letters of administration or appointment of
administrators or executors regardless of the nature or aggregate value of the property.

• Petitions for the declaration of absence and death and for the cancellation or correction
of entries in the Muslim Registries mentioned in Title VI of Book Two of the Code;

• All actions arising from customary contracts in which the parties are Muslim, if they did
not specified which law shall govern their relations; and

• All petitions for mandamus, prohibition, injunction, certiorari, habeas corpus, and all
other auxiliary writs and processes in aid of its appellate jurisdiction.

The SDC in concurrence with existing civil courts shall have original jurisdiction over the
following cases (paragraph (2) of Article 143):

• Petitions by Muslims for the constitution of family home, change of name and
commitment of an insane person to any asylum

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 • All other personal and real actions not mentioned in paragraph (1) (d) wherein the parties
involved are Muslims except those for forcible entry and unlawful detainer, which shall fall
under the exclusive original jurisdiction of the MTCs;

• All special civil actions for interpleader or declaratory relief wherein the parties are
Muslims or the property involved belongs exclusively to Muslims.

Article 144 of Presidential Decree No. 1083 provides that the SDC within shall have
appellate jurisdiction over all cases tried in the Shari’a Circuit Courts (SCC) within their
territorial jurisdiction.

Article 155 of Presidential Decree No. 1083 provides that the SCCs have exclusive
original jurisdiction over:

• All cases involving offenses defined and punished under the Code;

• All civil actions and proceedings between parties who are Muslims or have been married
in accordance with Article 13 of the Code involving disputes relating to:

o Marriage;
o Divorce recognized under the Code;
o Betrothal or breach of contract to marry;
o Customary dower (mahr);
o Disposition and distribution of property upon divorce;
o Maintenance and support, and consolatory gifts (mut’a); and
o Restitution of marital rights.

• All cases involving disputes to communal properties.

Rules of procedure are provided for in articles 148 and 158. En Banc Resolution of the
Supreme Court in 183, provided the special rules of procedure in the Shari’a courts (Ijra-
at-Al Mahakim Al Sharia’a).

Shari’a courts and personnel are subject to the administrative supervision of the Supreme
Court. Appointment of judges, qualifications, tenure, and compensation are subject to the
provisions of the Muslim Code (Presidential Decree No. 1083. SDCs and SCCs have the
same officials and other personnel as those provided by law for RTCs and MTCs,
respectively.

Quasi-Courts or Quasi-Judicial Agencies

Quasi-judicial agencies are administrative agencies, more properly belonging to the

Executive Department, but are empowered by the Constitution or statutes to hear and
decide certain classes or categories of cases.

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 Quasi-judicial agencies which are empowered by the Constitution are the Constitutional
Commissions: Civil Service Commission, Commission on Elections and the Commission
on Audit.

Quasi-judicial agencies empowered by statutes are: Office of the President. Department

of Agrarian Reform, Securities and Exchange Commission, National Labor Relations
Commission, National Telecommunication Commission, Employees Compensation
Commission, Insurance Commission, Construction Industry Arbitration Commission,
Philippine Atomic Energy Commission, Social Security System, Government Service
Insurance System, Bureau of Patents, Trademark and Technology, National Conciliation
Mediation Board, Land Registration Authority, Civil Aeronautics Board, Central Board of
Assessment Appeals, National Electrification Administration, Energy Regulatory Board,
Agricultural Inventions Board and the Board of Investments. When needed, the Supreme
Court issues rules and regulations for these quasi-judicial agencies in the performance of
their judicial functions. Republic Act No. 8799, known as the “Securities Regulation Code,”
reorganized the Securities and Exchange Commission (Chapter II) and provided for its
powers and function (sec.5). Specifically provided for in these powers and function is the
Commission’s jurisdiction over all cases previously provided for in sec. 5, Pres. Decree
No. 902-A (sec. 5.2). The Supreme Court promulgated rules of procedure governing intra-
corporate controversies under Republic Act No. 8799 (A.M. No. 01-2-04-SC).
The First Level Courts

Each city and municipality in the Philippines has its own trial court. These First Level Courts are
more commonly referred to as Metropolitan Trial Courts (MeTC), Municipal Trial Courts in Cities
(MTCC), Municipal Trial Court (MTC), and Municipal Circuit Trial Courts (MCTC). The MeTCs are
the first level courts in the Metropolitan Manila area. First level courts in cities outside Metropolitan
Manila are referred to as the MTCCs. The MTCs are first level courts that cover only one
municipality, whereas MCTCs cover multiple municipalities.

The Shari'a District & Circuit Courts

The Shari'a District Courts are equivalent to the Regional Trial Courts in rank, which were
established in certain provinces in Mindanao where the Muslim Code on Personal Laws is being
enforced. On the other hand, the Shari'a Circuit Courts are the counterpart of the Municipal Circuit
Trial Courts established in certain municipalities in Mindanao.

Assignment No. 6

After reading Chapter 6, prepare a checklist of legal terminologies that you have learned.
Use a table or matrix for a better presentation.

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Week 15-16

Supreme Court

The Supreme Court has both original and appellate jurisdiction. It exercises original jurisdiction
(cases are directly filed with the SC in the first instance without passing through any of the lower
courts) over cases affecting ambassadors, other public ministers and consuls, and over petitions
for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. (Art. VIII, §5(1)). It also
has original jurisdiction over writs of amparo, habeas data and the environmental writ of kalikasan.

It exercises appellate jurisdiction to review, revise, reverse, modify, or affirm final judgments, and
orders of the lower courts in:

All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is
in question.
All cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in
relation thereto.
All cases in which the jurisdiction of any lower court is in issue.
All criminal cases in which the penalty imposed is reclusion Perpetua or higher.
All cases in which only an error or question of law is involved.

The Supreme Court has administrative supervision over all courts and court personnel. (Article
VIII, §6) It exercises this power through the Office of the Court Administrator.

Composition of the Supreme Court

The Supreme Court shall be composed of a Chief Justice and fourteen Associate Justices. It may
sit en banc or, in its discretion, in divisions of three, five, or seven members. (Art. VIII, §4) Its
members shall be appointed by the President from a list of at least three nominees prepared by
the Judicial and Bar Council for every vacancy, without need of confirmation by the Commission
on Appointments. (Art. VIII, §9) Members of the Supreme Court are required to have proven
competence, integrity, probity and independence; they must be natural-born citizens of the
Philippines, at least forty years old, with at least fifteen years of experience as a judge of a lower
court or law practice in the country. (Art. VIII, §7) Justices shall hold office during good behavior
until they reach the age of seventy years, or become incapacitated to discharge the duties of
office. (Art. VIII, §11)

According to the 1987 Constitution, Art. VIII, sec. 5, The Supreme Court exercises the following
powers:

• Exercise jurisdiction over cases affecting ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

• Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of
Court may provide final judgments and orders of lower courts in:

o All cases ion which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or
regulation is in question.

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 o All cases involving the legality of any tax, impost, assessment, or toll, or any penalty
imposed in relation thereto.

o All cases in which the jurisdiction of any lower court is in issue.

o All criminal cases ion which the penalty imposed is reclusion perpetua or higher.

o All cases in which only an error or question of law is involved.

o Assign temporarily judges of lower court to other stations as public interest may require.
Such temporary assignment shall not exceed six months without the consent of the judge
concerned.

o Order a change of venue or place of trial to avoid a miscarriage of justice.

o Promulgate rules concerning the protection and enforcement of constitutional rights,

pleading, practice, and procedure in all courts, the admission to the practice of law, the
Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a
simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform
for all courts the same grade, and shall not diminish, increase or modify substantive rights.
Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless
disapproved by the Supreme Court.

o Appoint all officials and employees of the Judiciary in accordance with the Civil Service
Law (Sec. 5 , id.).

The Supreme Court has adopted and promulgated the Rules of Court for the protection and
enforcement of constitutional rights, pleadings and practice and procedure in all courts, and the
admission in the practice of law. In line with this mandate of the Rules of Court and extrajudicial
killing and disappearances, the Supreme Court passed two important Resolutions: the Rule on
the Writ of Amparo, approved on September 25, 2007 and effective on October 24, 2007, and
the Rule on the Writ of Habeas Data, approved on January 22, 2008 and effective February 2,
2008. Amendments are promulgated through the Committee on Revision of Rules. The Court
also issues administrative rules and regulations in the form of court issuances and the Supreme
Court E-Library website.

The Judicial and Bar Council was created by virtue of Art. VIII, sec. 8. under the supervision of
the Supreme Court. Its principal function is to screen prospective appointees to any judicial post.
The Judicial and Bar Council has promulgated on October 31, 2000 its Rules (JBC-009) in the
performance of its function. It is composed of the Chief Justice as ex-officio Chairman, the
Secretary of Justice and representatives of Congress as ex-officio members, a representative of
the Integrated Bar, a professor of law, a retired member of the Supreme Court and a
representative of the private sector as members.

The Philippine Judicial Academy (PHILJA) is the “training school for justices, judge, court
personnel, lawyers and aspirants to judicial posts.” It was originally created by the Supreme
Court on March 16, 1996 by virtue of Administrative Order No. 35-96 and was institutionalized on
February 26, 1998 by virtue of Republic 8557. It is an important component of the Supreme Court
for its important mission on judicial education. No appointee to the Bench may commence the
discharge his adjudicative function without completing the prescribed court in the Academy. Its

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organizational structure and administrative set-up are provided for by the Supreme Court in its En
Banc resolution ( Revised A.M. No. 01-1-04-sc-PHILJA).

The Philippine Mediation Center was organized “pursuant to Supreme Court “en banc” Resolution
A.M. No. 01-10-5-SC-PHILJA, dated October 16, 2001, and in line with the objectives of the Action
Program for Judicial Reforms (APJR) to decongest court dockets, among others, the Court
prescribed guidelines in institutionalizing and implementing the mediation program in the
Philippines. The same resolution designated the Philippine Judicial Academy as the component
unit of the Supreme Court for Court-Annexed Mediation and other Alternative Dispute Resolution
(ADR) Mechanisms, and established the Philippine Mediation Center (PMC).”

Mandatory Continuing Legal Education Office was organized to implement the rules on Mandatory
Continuing Legal Education for members of the Integrated Bar of the Philippines (B.M. No. 850 –
“Mandatory Continuing Legal Education (MCLE)). It holds office in the Integrated Bar of the
Philippines main office.

Court of Appeals

The Court of Appeals was established on February 1, 1936 by virtue of Commonwealth Act No.
3 and is considered as the second highest tribunal in the country. It is composed of one presiding
justice and 68 associate justices, all of which are appointed by the President from a shortlist
submitted by the Judicial and Bar Council. The associate justices shall have precedence
according to the dates (or order, in case of similar appointment dates) of their respective
appointments. The qualifications for the justices of the Supreme Court also apply to members of
the Court of Appeals.

The Court of Appeals’ principal mandate is to exercise appellate jurisdiction on all cases not falling
within the original and exclusive jurisdiction of the Supreme Court. Its decisions are final except
when appealed to the Supreme Court on questions of law.

Commonwealth Act No. 3 (December 31, 1935), pursuant to the 1935 Constitution (Art VIII, sec.
1), established the Court of Appeals. It was formally organized on February 1, 1936 and was
composed of eleven justices with Justice Pedro Concepcion as the first Presiding Justice.

Its composition was increased to 15 in 1938 and further increased to 17 in 1942 by virtue of
Executive Order No. 4. The Court of Appeals was regionalized in the later part of 1944 when five
District Court of Appeals were organized for Northern, Central and Southern Luzon, for Manila
and for Visayas and Mindanao. It was abolished by President Osmena in 1945, pursuant to
Executive Order No. 37 due to the prevailing abnormal conditions. However, it was re-established
on October 4, 1946 by virtue of Republic Act No. 52 with a Presiding Justice and fifteen (15)
Associate Justices. Its composition was increased by the following enactments: Republic Act No.
1605 to eighteen (18); Republic Act No. 5204 to twenty-four (24); Presidential Decree No. 1482
to one (1) Presiding Justice and thirty-four (34) Associate Justices; Batas Pambansa Blg. 129 to
fifty (50); Republic Act No. 8246 to sixty-nine (69). With Republic Act No. 8246, the Court of
Appeals in Cebu, and Cagayan de Oro were established.

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The jurisdiction of the Court of Appeals are as follows:

Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;
Exclusive original jurisdiction over actions for annulment of judgements of Regional Trial Courts;
and Exclusive appellate jurisdiction over all final judgements, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commission.

The Court of Appeals shall also have the power to try cases and conduct hearings, receive
evidence and perform acts necessary to resolve factual issues raised in cases falling within its
original and appellate jurisdiction, including the power to grant and conduct new trials or
proceedings.

Batas Pambansa Blg. 129 changed the name of the Court of Appeals to Intermediate Appellate
Court. Executive Order No. 33 brought back its name to Court of Appeals.

Section 9 of Batas Pambansa Blg. 129 as amended by Executive Order No. 33 and Republic Act
No. 7902 provides for the jurisdiction of the Court of Appeals as follows:

• Original jurisdiction to issue writs of mandamus, prohibition, certiorari habeas corpus, and quo
warrant, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;

• Exclusive original jurisdiction over actions for annulment of judgment of Regional Trial Courts;
and

• Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards
of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions,
including the Securities and Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service Commission, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948.

The Supreme Court, acting on the recommendation of the Committee on Revision of the Rules of
Court, resolved to approve the 2002 Internal Rules of the Court of Appeals (A.M. No. 02-6-13-
CA) and amended by a resolution of the Court En Banc on July 13, 2004 (A.M. No. 03-05-03-
SC).

Pursuant to Republic Act No. 9372 otherwise known as the Human Security Act of 2007, the Chief
Justice issued Administrative Order No. 118-2007, designating the First, Second and Third
Divisions of the Court of Appeals to handle cases involving the crimes of terrorism or conspiracy
to commit terrorism and all other matters incident to the said crimes emanating from the
Metropolitan Manila and Luzon. For those emanating from Visayas, all divisions of the Court of
Appeals stationed in Cebu are designated to handle these cases while the Court of Appeals
stationed in Cagayan De Oro will handle cases from Mindanao.

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Court of Tax Appeals

Created by Republic Act No. 1125 on June 16, 1954, it serves as an appellate court to review tax
cases. Under Republic Act No. 9282, its jurisdiction has been expanded where it now enjoys the
same level as the Court of Appeals. This law has doubled its membership, from three to six
justices.

The Supreme Court acting on the recommendation of the Committee on Revision of the Rules of
Court resolved to approve the Revised Rules of the Court of Tax Appeals (A.M. No. 05-11-07-
CTA) and amended by a resolution of the Court En Banc on November 22, 2005.

The Court of Tax Appeals has exclusive appellate jurisdiction to review by appeal the following:

• Decisions of the Commissioner of Internal Revenue in cases involving disputed,

assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed
in relation thereto, or other matters arising under the National Internal Revenue Code or
other laws administered by the Bureau of Internal Revenue;

• In actions of the Commissioner of Internal Revenue in cases involving disputed

assessments, refunds of internal revenue taxes, fees or other charges, penalties in
relation thereto, or other matters arising under the National Internal Revenue Code or
other laws administered by the Bureau of Internal Revenue, where the National Internal
Revenue Code provides a specific period of action, in which case the inaction shall be
deemed a denial;

• Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally
decided or resolved by them in the exercise of their original or appellate jurisdiction;

• Decisions of the Commissioner of Customs in cases involving liability for customs duties,
fees, or other money charges; seizure, detention or release of property affected; fines,
forfeitures or other penalties imposed in relation thereto; or other matters arising under the
Customs Law or other laws administered by the Bureau of Customs.

• Decisions of the Central Board of Assessment Appeals in the exercise of its appellate
jurisdiction over cases involving the assessment and taxation of real property originally
decided by the provincial or city board of assessment appeals;
• Decisions of the Secretary of Finance on customs cases elevated to him automatically for
review from decisions of the Commissioner of Customs which are adverse to the
Government under Section 2315 of the Tariff and Customs Code;

• Decisions of the Secretary of Agriculture in the case of nonagricultural product, commodity

or article, and the Secretary of Agriculture in the case of agricultural product, commodity
or article, involving dumping and countervailing duties under Section 301 and 302,
respectively, of the Tariff and Customs Code, and safeguard measures under R.A. No.
8800, where either party may appeal the decision to impose or not to impose said duties.

It also has jurisdiction over cases involving criminal offenses as herein provided:

• Exclusive original jurisdiction over all criminal offenses arising from violations of the
National Internal Revenue Code or Tariff and Customs Code and other laws administered
by the Bureau of Internal Revenue or the Bureau of Customs: Provided, however, That

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 offenses or felonies mentioned in this paragraph where the principal amount of taxes and
fees, exclusive of charges and penalties, claimed is less than One million pesos (P
1,000,000.00) or where there is no specified amount claimed shall be tried by the regular
Courts and the jurisdiction of the CTA shall be appellate. Any provision of law or the Rules
of Court to the contrary notwithstanding, the criminal action and the corresponding civil
action for the recovery of civil liability for taxes and penalties shall at all times be
simultaneously instituted with, and jointly determined in the same proceeding by, the CTA
the filing of the criminal action being deemed to necessarily carry with it the filing of the
civil action, and no right to reserve the filing of such action separately form the criminal
action will be recognized.

• Exclusive appellate jurisdiction in criminal offenses:

o Over appeals from judgments, resolutions or orders of the Regional Trial Courts in
tax collection cases originally decided by them, in their respective territorial
jurisdiction.
o Over petitions for review of the judgments, resolution or orders of the RTCs in the
exercise of their appellate jurisdiction over tax collection cases originally decided
by the MeTCs, MTCs and MCTCs, in their respective jurisdiction.

Ombudsman

The Ombudsman and his deputies, as protectors of the people shall act promptly on complaints
filed in any form or manner against officers or employees of the Government, or of any
subdivision, agency or instrumentality thereof, including government-owned or controlled
corporations, and enforce their administrative, civil and criminal liability in every case where the
evidence warrants in order to promote efficient service by the Government to the people (Section
13, R.A. No. 6770; see also Section 12 Article XI of the 1987 Constitution).

The Ombudsman shall give priority to complaints filed against high ranking government officials
and/or those occupying supervisory positions, complaints involving grave offenses as well as
complaints involving large sums of money and/or properties (Sec. 15, R.A. No. 6770).

Under the 1987 Philippine Constitution and the Ombudsman Act of 1989, the Office of the
Ombudsman independently monitors all three branches of the government for political corruption.
The Ombudsman "is principally tasked to investigate on its own or upon complaint by any person,
in any form or manner, any act or omission of any public officer or employee, including those in
government-owned or controlled corporations, which appears to be illegal, unjust, improper or
inefficient." After an investigation, the Ombudsman files charges at the Sandiganbayan, a special
anti-graft court.

The Offices of the Ombudsman includes the Ombudsman's own office, along with offices for a
team composed of a Sheriff, the Ombudsman's second in command, and six other deputies who
lead their respective divisions or bureaus.

The Office of the Ombudsman predates the 1987 Constitution. There have been several offices
established under various presidents of the Philippines whose duties are now subsumed under
the Office of the Ombudsman. President Elpidio Quirino established the Integrity Board in 1950;
President Ramon Magsaysay, the Presidential Complaints and Action Commission in 1957;
President Carlos P. Garcia, the Presidential Committee on Administration Performance Efficiency
in 1958; President Diosdado Macapagal, the Presidential Anti-Graft Committee in 1962; and

Page | 52
finally President Ferdinand Marcos, the Presidential Agency on Reform and Government
Operations in 1966.

In 1969, the Office of the Citizens Counselor was created by the Republic Act No. 6028.[5] It was
primarily designed to conduct fact-finding investigations and make recommendations to Congress
and the President.[5] The office was "not at all implemented."[5] Subsequently, Marcos created
the Complaints and Investigation Office in 1970 and the Presidential Administrative Assistance
Committee in 1971.None of these were successful nor were independent.

In the martial law-era 1973 Philippine Constitution (Sections 5 and 6, Article XIII), provided for the
establishment of a special court called the Sandiganbayan and an office of the ombudsman called
the Tanodbayan. On June 11, 1978, during martial law, the late strongman President Ferdinand
Marcos created by presidential decree the office of the Tanodbayan.[5][7] The Tanodbayan was
not independent but served at the pleasure of the president and could be removed at any time.

After Marcos was overthrown in the 1986 People Power Revolution, President Corazon Aquino
issued two Executive Orders (nos. 243 and 244) in July 1987 that established a new Office of the
Ombudsman and transformed the Tanodbayan into the Office of the Special Prosecutor under
the Ombudsman.[4] Following the passage of the 1987 Constitution, the Ombudsman Act of 1989
was passed to define the roles and structure of the Office.

In the Philippine context, the precursor for the current Office of the Ombudsman was created in
1978, when President Ferdinand E. Marcos created a more permanent Office of the Ombudsman
to be known as the Tanodbayan by virtue of Presidential Decree No. 1487. This was later
amended by Presidential Decree 1607.

The Office of the Ombudsman as we know it today was created by the 1987 Constitution, which
placed a higher level of accountability for government workers based on the principle that “public
office is a public trust.”

An Ombudsman is the guard of the guardians, another check to ensure that those in power would
not abuse their positions. The framers of the Constitution envisioned the Ombudsman to be
beyond politics thus removing the office from the bureaucratic structure and making it a
constitutional office.

Having the rank of a Chairman of a Constitutional Commission affords the holder both prestige
and clout, but there are also limitations to the far-reaching powers of the Ombudsman. The
Ombudsman serves until retirement unless otherwise impeached by the Legislature. In 1989,
Congress passed Republic Act. No. 6770, known as the Ombudsman Act, in order to delineate
the structure of the office.

Sandiganbayan
The Anti-Graft Court, or Sandiganbayan, was created to maintain integrity, honesty and efficiency
in the bureaucracy and weed out misfits and undesirables in government service (1973
Constitution (Art. XIII, sec. 5) and 1987 Constitution (Art. XI, sec. 4)). It was restructured by
Presidential Decree No. 1606 as amended by Republic Act No. 8249. It is composed of a
Presiding Justice and fourteen (14) Associate Justices still in five Divisions of three (3) Justices
each.

Jurisdiction

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Position of the Sandiganbayan in the Philippine judicial system as presented by the Department
of Budget and Management.

Presidential Decree 46 referred to as the gift-giving decree which makes it punishable for any
official or employee to receive directly or indirectly and for the private person to give or offer to
give any gift, present or other valuable thing on any occasion including Christmas, when such gift,
present or valuable thing is given by reason of his official position, regardless of whether or not
the same is for past favors or the giver hopes or expects to receive a favor or better treatment in
the future from the public official or employee concerned in the discharge of his official functions.
Included within the prohibition is the throwing of parties or entertainment in honor of the official or
employee or his immediate relatives.

Presidential Decree 749 which grants immunity from prosecution to any person who voluntarily
gives information about any violation of Art.210, 211 or 212 of the RPC, RA 3019, Sec.345 of the
NIRC, Sec. 3604 of the Customs and Tariff Code and other provisions of the said Codes
penalizing abuse or dishonesty on the part of the public officials concerned and other laws, rules
and regulations penalizing graft, corruption and other forms of official abuse and who willingly
testifies against the public official or employee subject to certain conditions.

The Sandiganbayan is vested with appellate jurisdiction over final judgments, resolutions or
orders of the Regional Trial Co

Composition

The Sandiganbayan has a total of fifteen departments (two head offices, twelve divisions, and
one Legal Research and Technical Staff) and a total of 385 authorized positions. 335 of 385 of
these positions are filled.

Electoral procedure

According to the Presidential Decree No. 1606, Section 1, the Presiding Justice and all Associate
Justices shall be appointed by the president, as amended by Republic Act 8249.

Appointment of the Court Officials and other employees, however, is not dependent on the
president. According to Rule II, Section 7 of the Revised Internal Rules of the Sandiganbayan,
"The Supreme Court shall appoint the Clerk of Court, the Division Clerks of Court and all other
personnel of the Sandiganbayan upon recommendation of the Sandiganbayan en banc chosen
from a list of qualified applicants prepared in accordance with the Civil Service Law, rules and
regulations.

Qualifications

Presidential Decree No. 1606 further states that “No person shall be appointed Presiding Justice
or Associate Justice of the Sandiganbayan; unless he is natural-born citizen of the Philippines, at
least 40 years of age and for at lease ten years has been a judge of a court of record or been
engaged in the practice of law in the Philippines or has held office requiring admission to the bar
as a pre-requisite for a like period.

Justices: Division and Roles

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The Sandiganbayan originally had three divisions that assisted the Office of the Presiding Justice,
according to the Article XIII of the 1973 Constitution. The number of divisions was raised to five
divisions in 1995. In 2015, through the Republic Act 10660, under the Aquino Administration, the
number of divisions was expanded to seven divisions.[24] Currently, the Sandiganbayan has Office
of the Presiding Justice, Office of the Clerk of Court, Legal Research and Technical Staff, seven
divisions (Office of the Deputy Clerk of Court), and five other divisions namely Judicial Records
Division, Administrative Division, Budget and Finance Division, Management Information System
Division, Security and Sheriff Services Division. The functions and roles of these offices and
divisions are:

Office of the Presiding Justice – Enjoy precedence over the other members of the
Sandiganbayan in all official functions; implements the policies, executes the resolutions and
enforces the orders of the Court en banc; performs the functions specifically vested upon him
by law, rules and regulations or those implied therefrom; performs all other functions and
duties inherent in his position.

Office of the Clerk of Court – The Clerk of Court is the administrative officer of the
Sandiganbayan. He shall discharge his functions under the control and supervision of the
Sandiganbayan en banc through the Presiding Justice. As administrative officer, he shall take
direct charge of the administrative operations of the Sandiganbayan and exercise general
supervision over its subordinate officials and employees except those belonging to the staff
of the Presiding Justice and the Associate Justices. He shall assist the Presiding Justice in
the formulation of programs and policies for consideration and action of the Sandiganbayan
en banc. The Clerk of Court shall act as its secretariat and prepare its agenda, minutes of
meetings and resolutions.

Legal Research and Technical Staff – Provides legal and technical assistance to the Court
by conducting legal research and studies; takes charge of all legal and related matters.

Office of the Deputy Clerk of Court (seven divisions) – Assists the Clerk of Court in
providing technical and administrative support and assistance to their particular Division of
the Court; takes charge of the pre and post adjudicative matters relative to cases assigned to
the First Division.

Judicial Records Division – Takes charge of docketing of cases; plans, implements and
evaluates programs for the systematic management of judicial records; and performs other
related functions. Prepares entries of judgment; issues copies of decisions, resolutions and
orders; maintains a systematic filing and records keeping; and handles the Court's information
system, monitoring requests for statistical data.

Administrative Division – Attends to the manpower development and service needs of the
Court; and performs all functions relative to administrative and personnel matters. Attends to
the procurement and maintenance of the properties, supplies and equipment of the Court,
including the Court's physical plant Takes charge of the collection and disbursement of the
Court.

Budget and Finance Division – Prepares and executes the budget of the Court; initiates
plans and formula for more effective utilization of funds allotted to the Court; fiscalizes the

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 agency's financial interest including disclosure of deficiencies in control needing corrections.
Keeps accounting records for the Court; prepares reports required by the Department of
Budget and Management, Commission on Audit and other government agencies.

Management Information System Division – Provides technical services related to the

planning, development, implementation and maintenance of information systems; takes c
care of all information and communications technology requirements of the Court.

Security and Sheriff Services Division – In charge of the formulation of plans,

implements and evaluates program for the systematic management of security of the

Sandiganbayan premises, property and personnel and performs other related functions;
takes charge of the formulation of systems for the effective services of Court processes
and enforcement of Writs issued by the various Divisions of the Court; serves as liaison
office with the various law enforcement agencies and the media regarding all court orders
and processes issued by the various divisions of the Court, and other court related
matters; takes custody of all accused processing their bail for their temporary liberty and/or
to turn-over accused who voluntarily surrenders to the authorized detention centers;
oversee that all judicial and extrajudicial proceedings are accomplished; takes charge of
the formulation of effective management and implementation of all kinds of court orders
or processes and writs coming from the various divisions of the Court.

Quasi-Courts or Quasi-Judicial Agencies

Quasi-judicial agencies are administrative agencies, more properly belonging to the Executive
Department, but are empowered by the Constitution or statutes to hear and decide certain classes
or categories of cases.

Quasi-judicial agencies which are empowered by the Constitution are the Constitutional
Commissions: Civil Service Commission, Commission on Elections and the Commission on Audit.

Quasi-judicial agencies empowered by statutes are: Office of the President. Department of

Agrarian Reform, Securities and Exchange Commission, National Labor Relations Commission,
National Telecommunication Commission, Employees Compensation Commission, Insurance
Commission, Construction Industry Arbitration Commission, Philippine Atomic Energy
Commission, Social Security System, Government Service Insurance System, Bureau of Patents,
Trademark and Technology, National Conciliation Mediation Board, Land Registration Authority,
Civil Aeronautics Board, Central Board of Assessment Appeals, National Electrification
Administration, Energy Regulatory Board, Agricultural Inventions Board and the Board of
Investments. When needed, the Supreme Court issues rules and regulations for these quasi-
judicial agencies in the performance of their judicial functions. Republic Act No. 8799, known as
the “Securities Regulation Code,” reorganized the Securities and Exchange Commission
(Chapter II) and provided for its powers and function (sec.5). Specifically provided for in these
powers and function is the Commission’s jurisdiction over all cases previously provided for in sec.
5, Pres. Decree No. 902-A (sec. 5.2). The Supreme Court promulgated rules of procedure
governing intra-corporate controversies under Republic Act No. 8799 (A.M. No. 01-2-04-SC).

Other Judicial Procedures

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Katarungang Pambarangay - Presidential Decree No. 1508, or the Katarungang Pambarangay
Law, took effect December 11, 1978, and established a system of amicably settling disputes at
the barangay level. Rules and procedures were provided by this decree and the Local
Government Code, Title I, Chapter 7, sec. 339-422). This system of amicable settlement of
dispute aims to promote the speedy administration of justice by easing the congestion of court
dockets. The Court does not take cognizance of cases filed if they are not filed first with the
Katarungang Pambarangay.

Alternative Dispute Resolution (ADR) System - Republic Act No. 9285 institutionalized the use of
an alternative dispute resolution system which serves to promote the speedy and impartial
administration of justice and unclog the court dockets. This act shall be without prejudice to the
adoption of the Supreme Court of any ADR system such as mediation, conciliation, arbitration or
any combination thereof. The Supreme Court by virtue of an En Banc Resolution dated October
16, 2001 (Administrative Matter No. 01-10-5-SC-PHILJA), designated the Philippine Judicial
Academy as the component unit of the Supreme Court for court-referred or court-related
mediation cases and alternative dispute resolution mechanism and establishing the Philippine
Mediation Center. Muslin law provides its own arbitration Council called The Agama Arbitration
Council.

Constitutional Commissions

Civil Service Commission - Act No. 5 (1900) established the Philippine civil service and was
reorganized as a Bureau in 1905. It was established in the 1935 Constitution. Republic Act No.
2260 (1959) converted it from a Bureau into the Civil Service Commission. Presidential Decree
No. 807 further redefined its role. Its present status is provided for in the 1987 Constitution, Art.
IX-B and reiterated by the provision of the 1987 Administrative Code (Executive Order No. 292).

Commission on Elections - It is the constitutional commission created by a 1940 amendment to

the 1935 Constitution whose primary function is to manage to maintain its authority and
independence in the conduct of elections. The COMELEC exercises administrative, quasi-judicial
and judicial powers. Its membership increased to nine with a term of nine years by the 1973
Constitution. It was however decreased to seven with a term of seven years without re-
appointment by the 1987 Constitution.

Commission on Audit - Article IX, sec, 2 of the 1987 Constitution provided the powers and
authority of the Commission on Audit, which is to examine, audit and settle all accounts pertaining
to the revenue and receipts of and expenditures or uses of funds and property owned or held in
trust by or pertaining to the Government including government owned and controlled corporations
with original charters.

The Bangko Sentral ng Pilipinas (Central Bank) is considered as a constitutional office in the
official Philippine government directory.

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 FINAL EXAMINATION

True of False. Write your answer on the space provided. (10 points each)

1) The Supreme Court under the present Constitution is composed of a Chief

Justice and 14 Associate Justices. The members of the Court are appointed by
the President from a list prepared by the Judicial and Bar Council of at least three
nominees for every vacancy. This new process is intended to “de-politicize” the
courts of justice, ensure the choice of competent judges, and fill existing vacancies
without undue delay.
2) The declaration of Martial Law through Proclamation No. 1081 by former
President Ferdinand E, Marcos in 1972 brought about the transition from the 1935
Constitution to the 1973 Constitution. This transition had implications on the
Court’s composition and functions.
3) The main sources of Philippine law are:
the Constitution - the fundamental and supreme law of the land.
statutes - including Acts of Congress, municipal charters, municipal legislation,
court rules, administrative rules and orders, legislative rules and presidential
issuances.
4) Public law is the body of law imposed by the state; the law of civil or private
rights; a civil law system relies on codes that provide explicit rules of a situation.
A judge's decision in a civil law system does not become binding or form a
precedent.
5) Bills are laws in the making. They pass into law when they are approved by
both houses and the President of the Philippines.
6) A tort is a civil case in which one party alleges that another caused them
physical or emotional harm.
7) Defendant is a person sued in a civil proceeding or accused in a criminal
proceeding.
8) The Court of Tax Appeals’ principal mandate is to exercise appellate jurisdiction
on all cases not falling within the original and exclusive jurisdiction of the Supreme
Court. Its decisions are final except when appealed to the Supreme Court on
questions of law.
9) The Anti-Graft Court, or Sandiganbayan, was created to maintain integrity,
honesty and efficiency in the bureaucracy and weed out misfits and undesirables
in government service.
10) The Shari'a District Courts are equivalent to the Regional Trial Courts in rank,
which were established in certain provinces in Mindanao where the Muslim Code
on Personal Laws is being enforced.

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References:

List of Business Laws in the Philippines

JUNE 1, 2013 BY VIC

What is Bankruptcy? - Esquire Philippineswww.esquiremag.ph › money › capital › what-is-

bankr..

Labor Code of the Philippines | Global People Strategistwww.globalpeoplestrategist.com › labor-

code-of-the-Philippines

Labor Code of the Philippines - DOLEwww.dole.gov.ph › php_assets › uploads › 2017/11

Q&A: Labour & Employment Law in Philippines - Lexologywww.lexology.com › library › detail

Labor Code of the Philippines | Bureau of Labor Relationsblr.dole.gov.ph › 2014/12/11 › labor-

code-of-the-phili...

Downloaded from the Department of Labor and Employment, Republic of the Philippines - 29
September 2011 http://www.dole.gov.ph/labor_codes.php?id=34

https://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-JUDICIAL-
SYSTEM.html#ixzz6jVXn3mzY

Labor Law PH – Philippine Labor Laws and Regulationswww.laborlaw.ph

http://cta.judiciary.gov.ph/

https://ca2.judiciary.gov.ph/

Office of the Ombudsman | WE PROTECTwww.ombudsman.gov.ph

https://www.nationsencyclopedia.com/Asia-and-Oceania/Philippines-JUDICIAL-
SYSTEM.html#ixzz6jVXn3mzY

Prepared by:

RAQUEL G. JAVIER, MF, LPT

Faculty Committee on OALT 3023
Legal Terminology

June 2021

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